Ethereum has underperformed other cryptocurrencies throughout 2024. Analyst Markus Thielen has suggested staying away from Ethereum for 2025.
Despite Ethereum ETFs providing significant investment inflows in December, Ethereum has failed to achieve the expected price increase, seeing a level of $3,416.1 throughout 2024. While the leading cryptocurrency Bitcoin rose by 114% on an annual basis to $95,721.8, Ethereum recorded only a 42% increase. Analysts state that Ethereum is struggling in the competitive environment.
Ethereum, the second largest cryptocurrency in the market after Bitcoin, did not meet investors' expectations with its performance. While XRP gained 267%, Solana gained 77%, and although both lagged behind Ethereum, Ethereum's rise was more limited. Markus Thielen, Head of 10x Research, made a negative prediction for Ethereum's performance in 2025. Thielen said, "We value Ethereum's volatility, but we think Ethereum will continue to lag Bitcoin in the medium term. We recommend avoiding ETH."
Thielen noted that technical updates to the Ethereum network do not provide a competitive advantage and that the increasing number of competitors could reduce Ethereum’s market share. Ethereum spot ETFs were launched in July 2024 but initially saw low investor interest. Despite this, net investment inflows exceeded $2.08 billion in December, indicating increasing demand for Ethereum ETFs.
“The initial lack of interest in ETFs was directly linked to the risk perception of Ethereum,” Thielen said. “However, the increase in investment inflows in December could be a sign of significant change in market environments.” Still, uncertainty remains about the sustainability of this increase.
Ethereum’s market competition and future uncertainties may require investors to reconsider their strategies. Technological developments, market share, and ETF performance are among the most critical factors that will shape Ethereum’s future position.