Original title: Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025.
Original author: Tom Mitchelhill
Original source: https://cointelegraph.com/
Translated by: Daisy, Mars Finance
Analysts and experts say that AI entities, a series of important network upgrades, and improvements in the US regulatory environment are all reasons why Ethereum fans are optimistic about 2025.
Ethereum supporters say that AI entities, major network upgrades, increased institutional interest, and the comprehensive regulatory reforms brought by the new US President Donald Trump’s crypto-friendly government are all reasons to be optimistic about 2025.
Kain Warwick, founder of Infinex, stated in an interview with Cointelegraph that although Ethereum's performance in 2024 may be somewhat flat, this asset is like a 'compressed spring' ready for a breakthrough in 2025.
According to TradingView data, as of now, ETH (Ether) has risen 53.5% year-to-date, 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 92.7%, 57%, and 276.5% respectively this year.
“The longer you compress it, the more it bounces back. 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 several Ethereum Improvement Proposals (EIPs) and the improvements in user experience that these upgrades will bring, considering them key turning points for Ethereum and ETH price trends.
“In 2025, I believe we will see improvements in account abstraction, significant progress in L2 interoperability, and a substantial improvement in user experience 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 — the next significant milestone on Ethereum's roadmap, expected to launch in early 2025.
Gaia Regis, co-founder and CEO of the restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change the way the Ethereum 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 a million Ethereum validators — which is beginning 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 pressure on the network,” said Regis.
“Reducing pressure means a faster network, and the Ethereum user experience will be better.”
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, with the most important being EIP-7702, aimed at improving the user experience for wallets and chain abstraction.
“This will make staking cheaper, leading to more participation in staking, thus decreasing staking rewards over time. That is why we are extremely optimistic about restaking. Many people will want to increase their staking rewards by backing 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, particularly decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under Trump’s government and the more crypto-friendly SEC.
On December 4, Trump nominated crypto-friendly businessman and former SEC commissioner Paul Atkins to be 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 entry barriers, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed.”
Stablecoins, tokenization, and AI entities.
Bitwise Chief Investment Officer Matt Houghan stated that Ethereum enters 2025 with three major advantages 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 entities. It dominates the market share in all three areas,” Houghan said.
He added, “I believe that the excitement in these three areas next year will impact Ethereum, making it the comeback kid of 2025. You can already see this in the recent strong performance and ETF inflows.”
In the past two weeks, Ethereum ETFs have seen net inflows of $1.5 billion, becoming one of the largest inflow periods among eight spot funds, according to Farside Investors data.
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 US 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 second-layer networks,” Houghan said.
“We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this booming 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' new high of $7,000.
More second-layer networks, restaking, and better DApps.
Ethereum supporter and Chief Marketing Officer of crypto company Keyrock, Edu Timmers, believes that the release of new second-layer networks like Abstract and Deutsche Bank's project will enhance the widespread adoption of the Ethereum ecosystem.
Timmers also mentioned the rise of Hyperliquid, an on-chain perpetual contract protocol built on Arbitrum, which demonstrates the growth of Ethereum's on-chain dominance, and he expressed his expectation that Ethereum and its decentralized applications (DApps) ecosystem will begin to compete 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 undervalued area to watch in 2025, which he claims will make the network more robust and versatile.
“As chains begin to transfer security to the Ethereum mainnet through solutions like EigenLayer, restaking may experience breakthroughs.”
