Author: Anderson Sima, Foresight News
Since the beginning of 2024, if numerous cryptocurrency believers were to list the most disappointing cryptocurrency assets, there is no doubt Ethereum would top the list.
In the last cycle, Ethereum shone brightly with new applications like DeFi and NFTs, once reaching a historical high of $4,800, creating a wealth code with an increase of over 20 times. When Bitcoin surged ahead, people's expectations for the second dragon were also heightened.
However, in the new cycle, while Bitcoin has broken through $90,000, Ethereum is barely holding the $3,000 mark. Even after a brief surge to $4,000 at the beginning of the year, it once fell to the $2,200 mark, during which many cryptocurrency believers eagerly awaiting Ethereum were trapped, including the usually shrewd 'Brother Sun', indicating that institutional investors cannot escape either. Currently, the exchange rate of Ethereum to Bitcoin has dropped to a historical low of 0.034.
As the saying goes, 'In the mountains and rivers, one doubts there is no way, but the willows are dark and the flowers are bright in another village.'
The author believes that the predicament faced by Ethereum is an inevitable phase in the early development of the Web3 industry. When Bitcoin occupies the consensus high ground in the realm of digital gold, Ethereum's vision of a world computer encounters some structural contradictions, thus failing to resonate with its market value, and cannot realize value expectations in the short term. However, the author believes that all current difficulties are essentially paper tigers, and we are in the 'dawn'.
The Dilemma of Ethereum
The essential difference in this cryptocurrency bull market compared to the previous two cycles is that Ethereum has not led the wave of technological innovation. Compared to the ICO frenzy of 2017 and the DeFi Summer of 2020, the biggest hotspot in this cycle is Meme, with most of the Meme community on Solana; the Layer2 and Restaking concepts led by Ethereum have instead had some negative impact on the Ethereum ecosystem.
Currently, although hundreds of Layer2 ecosystems have improved Ethereum's trading experience and performance, they have also brought serious diversion problems; the reduced fees after the upgrade of Blobs have also affected Ethereum's economic model and staking income. As ETH demand decreases, the destruction rate falls short of expectations, leading to an inflationary state, which also weakens its potential as a store of value; at the same time, Bitcoin has an irreplaceable appeal to institutional investors in the field of value storage, and this year's launch of Ethereum spot ETH has become a lukewarm presence.
On the other hand, as the community leader, V God’s rationalist temperament deeply influences the entire ecosystem. Vitalik has a very grand vision for Ethereum's future development, and recently he has angrily written several long articles, conducting various studies on Ethereum's decentralization, security, scalability, and other aspects.
However, from the community's perspective, some of these goals are overly idealistic and have a significant gap from current technological constraints and market expectations. At the same time, Vitalik has too much influence in the community governance and decision-making of Ethereum, which contradicts the ideal of decentralization and may lead to a decision-making process that is not democratic and decentralized, with the community's voice being intentionally or unintentionally overlooked, making him seem particularly disconnected from the collective pursuit of the wealth code.
But isn't that V God? The young man who shed tears for Blizzard's nerfing of warlock skills and angrily entered the blockchain world to create Ethereum. If V God becomes the New Money shouting incessantly in a world of paper dreams and gold, then perhaps it is the crisis that the Ethereum community needs to worry about FUD.
At dawn
Although the rise of Meme culture and Solana has attracted a lot of attention in this cycle, it does not mean that Ethereum has not made progress in technical innovation. While Layer2 and Restaking may have brought some challenges in the short term, in the long run, they provide a foundation for the sustainable development of the Ethereum ecosystem: by reducing transaction costs and improving transaction speeds, Layer2 solutions make Ethereum more suitable for large-scale applications, which is crucial for attracting more users and developers. The staking mechanism encourages ETH holders to participate in network maintenance, enhancing the network's decentralization and security.
Regarding concerns about the decrease in ETH demand and inflationary status, the Ethereum community and developers are actively seeking solutions: the community is discussing further adjustments to EIP-1559 to optimize ETH's burning and issuance mechanisms.
At the same time, although Bitcoin has an appeal to institutional investors as a store of value, Ethereum offers a more comprehensive ecosystem, including smart contracts, DeFi, NFTs, etc. Ethereum and Bitcoin are complementary in many ways, rather than simply competitive. Ethereum's versatility gives it a unique position in the cryptocurrency space, capable of supporting a wider range of application scenarios. This is something that no other public chain can compare to; the so-called 'Ethereum killers' are due to problems within Ethereum itself, rather than other public chains being able to replace Ethereum.
Ethereum's hope lies in its continuous technological advancement, strong developer community, and adaptability to emerging market demands. However, in this cycle, Ethereum needs to focus on realistic business applications that can be implemented while emphasizing long-term sustainable development, allowing each business application to serve as a step towards long-termism.
Ten thousand dollars is not a dream
The author boldly predicts that before the 2026 midterm elections, Ethereum is expected to break through $10,000. Standard Chartered Bank analyst Kendrick reiterated Standard Chartered's price target for the end of 2025, which is $200,000 for Bitcoin and $10,000 for Ethereum.
With the changes in the political landscape of the US and Trump's support for the cryptocurrency market, a large amount of traditional capital has flowed into the cryptocurrency field. When traditional capital truly enters the crypto market, Ethereum, as a mainstream crypto asset with a spot ETF, is very likely to attract more capital attention.
According to Farside Investors data, on November 12, the net inflow of the US Ethereum spot ETF was $134.4 million, setting a historical record.
The launch of the Ethereum spot ETF provides an important financial support for the growth of Ethereum's price. ETF investors in traditional markets are usually long-term investors, and the liquidity of spot ETFs has increased the market's demand for Ethereum. For traditional investors who already hold Bitcoin, having Ethereum, which possesses innovative potential and ecological effects, is also one of the best channels for entering the cryptocurrency space, which will further accelerate Ethereum's emergence as a mainstream investment tool.
As for the Layer2 diversion issue, as the experience of Ethereum's mainnet gradually improves and competition settles down, we may see more L2 solutions integrated into Ethereum's mainnet. The smooth advancement of this process will provide Ethereum with stronger traffic support and gas fee income, alleviating inflationary pressure and making Ethereum's economic model more robust.
It is expected that in the first half of 2025, the integration progress of Ethereum's L2 will gradually enter a substantial implementation phase, with some Layer2 being eliminated. The integration of L2 will attract more developers and users back to the mainnet, thereby promoting the prosperity of the Ethereum ecosystem. During this phase, prices are expected to stabilize in the range of $3,000 to $5,000.
In the coming years, innovative applications such as PayFi and RWA are expected to continue to grow, especially after the enhancement of smart contract functionalities and the gradual improvement of L2 solutions, more highly complex financial applications will emerge. The birth of these applications is expected to once again stimulate the market's demand for Ethereum.
For example, the integration of cross-chain liquidity based on L2, and the maturation of on-chain financial derivatives markets will bring a large volume of transactions, further enhancing Ethereum's value. RWA and payments that interact with traditional assets are both potential application killers. It is expected that by the second half of 2025, these emerging applications will drive Ethereum's value to exceed $6,000 to $8,000.
At the same time, with the increasing influence of political figures such as Trump who support cryptocurrencies in the US, it is expected that the US cryptocurrency market will gradually usher in a looser regulatory environment in the future. In addition, the global economic slowdown and the risk of fiat currency inflation will lead more investors to consider digital assets as a hedging tool, further increasing demand in the cryptocurrency market.
If the US and other major economies gradually relax regulations on cryptocurrencies within the next 1-2 years, and the demand from global investors to combat inflation and fiat currency depreciation increases, this will provide strong macroeconomic support for the rise in Ethereum's price. It is expected that by early 2026, under favorable market conditions, Ethereum may experience a large-scale price breakthrough, thereby reaching the $10,000 mark.
Recently, Vitalik gave an interview to Foresight News, where he mentioned, 'The only surprise is that if Ethereum as an asset is not known to anyone, it cannot succeed. So from this perspective, Ethereum cannot completely become a background presence.' The ambition of Ethereum is known to some.
