Analysts and experts say that AI agents, a series of important network upgrades, and improvements in the U.S. regulatory environment are all reasons Ethereum fans are looking forward to 2025.
Ethereum supporters say that AI agents, significant network upgrades, increased institutional interest, and comprehensive regulatory reforms brought about 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 to break through in 2025.
According to TradingView data, as of now, ETH (Ether) has accumulated a gain of 53.5% 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 this year.
"The longer you compress it, the more forcefully it rebounds. There are many favorable factors, as well as some constraints, but once it breaks through, people will say 'Wow'," Warwick said.
Source: Kain Warwick
He mentioned some Ethereum Improvement Proposals (EIPs) and the user experience improvements brought by these upgrades, considering them key turning points for Ethereum and ETH price movements.
"In 2025, I expect to see improvements in account abstraction, significant progress in L2 interoperability, and a substantial improvement in the user experience between L2s."
Ethereum will undergo 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 significant 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 how Ethereum's security layer operates.
"Currently, Ethereum staking mainly 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.
"Pectra addresses this issue by increasing the maximum effective balance of 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 wallet and chain abstraction.
"This will make staking cheaper, leading to more people participating in staking, which will gradually reduce staking rewards over time. For this reason, we have a very optimistic view on restaking. Many will hope to enhance their staking rewards by securing other networks."
Trump's crypto-friendly SEC will particularly benefit 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, particularly decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under the Trump administration and a more crypto-friendly U.S. Securities and Exchange Commission (SEC).
On December 4, Trump nominated pro-crypto businessman and former SEC commissioner Paul Atkins to be the next SEC chair, while current chair 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 barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed."
Stablecoins, tokenization, and AI agents
Matt Houghan, Chief Investment Officer of Bitwise, stated that Ethereum enters 2025 with three major advantages and expects this asset to experience an explosion 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 the market share in all three areas," Houghan said.
He added, "I believe excitement in these three areas will impact Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF inflows."
In the past two weeks, Ethereum ETF net inflows reached $1.5 billion, making it one of the largest inflow 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 believes that the new crypto-friendly SEC under Trump is particularly beneficial for Ethereum.
"I am looking forward to lifting the 'Sword of Damocles' that has hung 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 2 networks," Houghan said.
"We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this thriving environment."
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 of a new high of $7,000.
More Layer 2 networks, restaking, and better DApps
Ethereum supporter and Chief Marketing Officer of crypto company Keyrock, Edu Timmers, believes that with the launch of new Layer 2 networks like Abstract and Deutsche Bank's project, this will enhance the broad application of the Ethereum ecosystem.
Timmers also mentioned that the recent rise of the on-chain perpetual contract protocol Hyperliquid built on Arbitrum demonstrates the growing dominance of Ethereum on-chain, stating 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 noted that Ethereum restaking is another undervalued area to watch in 2025, stating that it will make the network more robust and versatile.
"As chains start to transfer security to the Ethereum mainnet through solutions like EigenLayer, restaking may experience a breakthrough."
