Ethereum supporters say the rise of AI agents, major network upgrades, increased institutional interest, and sweeping regulatory changes brought about by the crypto-friendly administration of new U.S. President Donald Trump are reasons to be excited about 2025.
Infinex founder Kain Warwick said that although Ethereum's performance in 2024 was slightly lackluster, the asset was like a "compressed spring" and was ready for a breakthrough in 2025.
According to TradingView data, ETH (Ether) has risen 53.5% this year so far, from $2,350 on January 1 to $3,478 at the time of writing.
Meanwhile, other major crypto assets including Solana, Cardano, and Ripple’s XRP have risen 92.7%, 57%, and 276.5% year-to-date, respectively. Warwick said:
The longer you hold it down, the harder it's going to bounce back. There's a lot of factors that are working in its favor, and there's some factors that are working against it, but once it breaks through, people are going to say 'Ah, damn.'
He mentioned some Ethereum Improvement Proposals (EIPs) and the improved user experience brought about by these upgrades, believing that these are key turning points in the price trend of Ethereum and ETH.
In 2025, I think we’ll see improvements in account abstraction, a lot of progress in L2 interoperability, and a big improvement in the user experience between L2s.
Ethereum will have Pectra upgrade in 2025
One of the major upgrades that Warwick and other Ethereum supporters are eagerly awaiting is the Pectra upgrade — the next major milestone on the Ethereum roadmap, which is expected to be launched in early 2025.
Gaia Regis, co-founder and CEO of restaking platform Byzantine, said the Pectra upgrade will fundamentally change the way Ethereum’s security layer operates.
“Currently, Ethereum staking relies primarily on liquidity. Essentially, many ETH holders want to participate in staking. This is generally a good thing because more nodes means more decentralization and higher security,” she said.
However, Regis said ethereum has now reached a massive scale — with more than 1 million ethereum validators communicating with each other — which is starting to slow down the network.
“Pectra addresses this issue by increasing the maximum valid balance for a validator from 32 ETH to 2,048 ETH, significantly reducing the number of validators required and reducing pressure on the network,” Regis said.
Less pressure means a faster network and a better experience for Ethereum users.
In September this year, Ethereum core developers decided to split the Pectra upgrade into two major suites. The first Pectra suite will introduce a total of eight EIPs, the most important of which is EIP-7702, which aims to improve the user experience of wallets and chain abstraction.
“This will make staking cheaper, leading to more people staking, which will reduce staking rewards over time. This is why we are extremely bullish on restaking. Many people will want to increase their staking rewards by securing other networks.
Trump’s crypto-friendly SEC would be particularly beneficial to ETH
Saul Rejwan, managing partner of crypto venture capital firm Masterkey, told 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 U.S. Securities and Exchange Commission (SEC).
On December 4, Trump nominated pro-cryptocurrency businessman and former SEC commissioner Paul Atkins as the next SEC chairman, while current chairman Gary Gensler plans to resign on January 20.
“DeFi projects on Ethereum will flourish in a more favorable regulatory environment, and areas like restaking only need a little regulatory push to attract institutional investors,” he said.
We expect this new leadership will lower barriers to entry, making it easier for early-stage crypto entrepreneurs and resilient companies to innovate and succeed.
Stablecoins, Tokenization, and AI Agents
Bitwise Chief Investment Officer Matt Houghan said Ethereum has three major advantages as it enters 2025 and expects the asset to explode in the new year.
“Ethereum is at the center of three of the biggest trends in crypto: the rise of stablecoins, tokenization, and AI agents. It has dominant market share in all three,” Houghan said.
He added: “I think the excitement in these three areas over the next year will influence Ethereum to become the comeback king in 2025. You can already see this in the recent strong performance and ETF inflows.”
Ethereum ETFs have seen net inflows of $1.5 billion over the past two weeks, one of the largest periods of inflows among the eight spot ETFs, according to Farside Investors data.
Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump is particularly beneficial to Ethereum.
“I’m looking forward to lifting 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 2,” said Houghan.
We are entering a golden age of crypto, and Ethereum will be one of the main beneficiaries of this boom.
Overall, Houghan said Bitwise expects ETH to surpass its previous all-time high of $4,878, reaching what he described as a “conservative” forecast of new highs of $7,000.
More Layer2, heavy staking, and better DApps
Edu Timmers, an Ethereum supporter and chief marketing officer of crypto company Keyrock, believes that with the release of new Layer 2 projects such as Abstract and Deutsche Bank projects, this will enhance the widespread application of the Ethereum ecosystem.
Timmers also mentioned the recent rise of Hyperliquid, an on-chain perpetual contract protocol built on Arbitrum, as evidence of Ethereum’s growing on-chain dominance, and said he expects Ethereum and its decentralized application (DApps) ecosystem to begin 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 said Ethereum restaking is another underappreciated area worth paying attention to in 2025, saying it will make the network more robust and versatile.
As chains begin to move security to the Ethereum mainnet through solutions like EigenLayer, heavy staking may see a breakthrough.