Original title: (Why Ethereum maxis say ETH will be the 'comeback kid' of 2025)
Written by: Tom Mitchelhill
Compiled by: Daisy, Mars Finance
Analysts and experts say that AI agents, a series of important network upgrades, and improvements in the U.S. regulatory environment are all reasons for Ethereum fans to look forward to 2025.
Ethereum supporters say that AI agents, significant network upgrades, increased institutional interest, and comprehensive regulatory reforms brought by the new crypto-friendly government of President Donald Trump are all reasons to look forward to 2025.
Kain Warwick, founder of Infinex, stated in an interview with Cointelegraph that although Ethereum may perform slightly dull in 2024, this asset is like a "compressed spring" that is ready for a breakout in 2025.
According to TradingView data, as of now, ETH (Ether) has accumulated a 53.5% increase this year, rising from $2,350 on January 1 to the current $3,478.
ETH has posted a year-to-date gain of 53.5%. Source: TradingView
Meanwhile, other major crypto assets, including Solana, Cardano, and Ripple's XRP, have risen by 92.7%, 57%, and 276.5%, respectively, since the beginning of this year.
"The longer you press it, the harder it rebounds. There are many favorable factors and some constraints, but once it breaks through, people will say, 'Oh my God,'" Warwick said.
Source: Kain Warwick
He mentioned some Ethereum Improvement Proposals (EIPs) and the user experience enhancements brought about by these upgrades, believing these are key turning points for Ethereum and ETH price movements.
"In 2025, I believe we will see improvements in account abstraction, significant progress in L2 interoperability, and a substantial enhancement in user experiences between L2s."
Ethereum will welcome the Pectra upgrade in 2025.
One of the major upgrades that Warwick and other Ethereum supporters are eagerly anticipating is the Pectra upgrade—this is the next important milestone on Ethereum's roadmap, expected to be launched in early 2025.
Gaia Regis, co-founder and CEO of the restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change the way Ethereum's security layer operates.
"Currently, Ethereum staking primarily relies on liquidity. Essentially, many ETH holders want to participate in staking. This is usually a good thing because more nodes mean more decentralization and higher security," she said.
However, Regis stated that Ethereum has now reached a massive scale—communication among over 1 million Ethereum validators—which is starting to slow down the network's speed.
"Pectra addresses this issue by raising the maximum effective balance for validators from 32 ETH to 2,048 ETH, significantly reducing the number of required validators and alleviating network pressure," Regis said.
"Less pressure means a faster network, and the experience for Ethereum users will also improve."
In September of this year, Ethereum core developers decided to split the Pectra upgrade into two main packages. The first Pectra package will introduce a total of eight EIPs, the most important of which is EIP-7702, aimed at improving the user experience of wallets and chain abstraction.
"This will make staking cheaper, leading to more people participating in staking, which will gradually lower staking rewards over time. For this reason, we are extremely optimistic about restaking. Many people will want to increase their staking rewards by securing other networks."
Trump's crypto-friendly SEC will be particularly beneficial for ETH.
Saul Rejwan, managing partner of crypto venture capital firm Masterkey, stated in an interview with Cointelegraph that Ethereum and more 'legitimate' projects in the crypto industry, especially decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under the Trump administration and a more crypto-friendly SEC.
On December 4, Trump nominated pro-crypto businessman and former SEC commissioner Paul Atkins to serve as the next SEC chairman, while current chairman Gary Gensler plans to resign on January 20.
"In a more favorable regulatory environment, DeFi projects on Ethereum will thrive, and areas like restaking only need a little regulatory push to attract institutional investors," he said.
"We expect this new leadership to lower the barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed."
Stablecoins, tokenization, and AI agents
Bitwise Chief Investment Officer Matt Houghan stated that Ethereum has three major advantages as it enters 2025 and expects this asset to experience a breakout in the new year.
"Ethereum is at the center of the three biggest trends in the crypto industry: the rise of stablecoins, tokenization, and AI agents. It dominates market share in all three areas," Houghan said.
He added, "I believe the excitement in these three areas next year will impact Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF fund inflows."
In the past two weeks, net inflows into Ethereum ETFs reached $1.5 billion, becoming one of the largest influx periods among eight spot funds, according to data from Farside Investors.
Ethereum ETFs have witnessed over $1.5 billion in net inflows in the last two trading weeks. Source: Farside Investors
Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump will be particularly beneficial for Ethereum.
"I look forward to the lifting of the 'sword of Damocles' that has been hanging over the U.S. crypto industry for the past four years. Washington's new approach will unleash millions of crypto entrepreneurs, many of whom will build killer applications on Ethereum and its layer two networks," Houghan said.
"We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this thriving growth."
Houghan stated that overall, Bitwise expects ETH to break through the previous all-time high of $4,878, reaching what he describes as a 'conservative' forecast high of $7,000.
More layer two networks, restaking, and better DApps
Edu Timmers, Chief Marketing Officer of crypto company Keyrock, believes that with the launch of new layer two networks like Abstract and Deutsche Bank's project, the widespread application of the Ethereum ecosystem will be enhanced.
Timmers also mentioned that the recent rise of the on-chain perpetual contract protocol Hyperliquid built on Arbitrum proves the growing dominance of Ethereum on-chain. He stated that he expects Ethereum and its decentralized applications (DApps) ecosystem to start competing with centralized market leaders like Binance in the new year.
"Projects like Hyperliquid will start competing with centralized players like Binance in 2025, rather than decentralized projects like Uniswap," Timmers said.
Additionally, Timmers stated that Ethereum restaking is another underrated area worth watching in 2025, claiming it will make the network more robust and versatile.
"As chains begin to transfer security to the Ethereum mainnet through solutions like EigenLayer, restaking could see a breakthrough."
