Ethereum (ETH) has attracted attention in past years by exhibiting significant performances in the first quarters of the new year. ETH, which gained 518% and 161% in value in the first quarters of 2017 and 2021, respectively, managed to outstrip Bitcoin's gains during these periods. These historical successes bring the expectation of a similar rally in Ethereum for 2025 to the agenda.
The first quarter of 2025 holds both great opportunities and serious risks for Ethereum investors. While the interest in ETFs and the positive outlook provided by historical data give investors hope, the impact of macroeconomic conditions requires careful formulation of strategies.
Impact of Spot Ethereum ETFs
In the last trading days of 2024, interest in spot Ethereum exchange-traded funds (ETFs) has reached a significant level. Net inflows exceeded $2.5 billion in the last 24 trading days. Analysts predict that this flow could exceed $50 billion by 2025. CK Zheng, chief investment officer of ZX Squared Capital, points out that the Trump administration’s crypto-friendly regulations could further increase these flows.
However, there are also concerns that macroeconomic conditions could limit Ethereum’s potential. The US Federal Reserve’s (Fed) limiting interest rate cut expectations and taking a hawkish stance could tighten liquidity in crypto markets, hindering ETH’s growth. 10x Research founder Markus Thielen predicts that Ethereum may not reach a new all-time high in the first quarter of 2025.
Competition Between Bitcoin and Ethereum
With Bitcoin expected to rise to $160,000 in the same period, the rivalry between the two leading crypto assets is drawing renewed attention. Given Ethereum’s past performances, investors’ interest in how ETH will fare in 2025 continues to grow.