When the mountains are heavy and the waters are steep, one doubts if there is no way; when the willows are dark and the flowers bright, there is another village.
Written by: Anderson Sima, Foresight News
Since the beginning of 2024, if many cryptocurrency believers were to list the most disappointing crypto assets, there is no doubt that Ethereum would top the list.
In the previous cycle, Ethereum, which shone with new applications like DeFi and NFT, once reached a historical high of $4800, creating a wealth code with a growth of over 20 times. When Bitcoin soared ahead, people's expectations for the second-largest cryptocurrency were also raised to the maximum.
However, in this new cycle, when Bitcoin has broken through $90,000, Ethereum barely stands at the $3000 mark. Even after a brief surge to $4000 at the beginning of the year, it once fell to around $2200, during which a host of cryptocurrency believers who were eagerly waiting for Ethereum were trapped, including the usually profit-seeking 'Brother Sun', indicating that institutional investors are also not immune. Currently, the exchange rate of Ethereum to Bitcoin has dropped to a historical low of 0.034.
As the saying goes, 'When the mountains are heavy and the waters are steep, one doubts if there is no way; when the willows are dark and the flowers bright, there is another village.'
The author believes that the predicament Ethereum is currently facing is an inevitable stage of the early development of the Web3 industry. When Bitcoin occupied the consensus high ground in the field of digital gold, Ethereum's vision of a world computer encountered some structural contradictions, failing to resonate with its market value and unable to realize value expectations in the short term. However, the author believes that all current predicaments are essentially paper tigers, and we are in the 'dawn time'.
Ethereum's Predicament
The current cryptocurrency bull market has a fundamental difference from the previous two cycles: Ethereum has not led the wave of technological innovation. Compared to the ICO frenzy in 2017 and the DeFi Summer of 2020, the biggest hotspot in this cycle is Meme, and most of the Meme community is in Solana; the concepts of Layer2 and Restaking 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 fragmentation issues; the reduction in costs after the upgrade of Blob also impacts Ethereum's economic model and staking income. When ETH demand decreases and the burning speed is not as expected, inflationary conditions begin to appear, which also weakens its value storage potential; at the same time, Bitcoin has an irreplaceable attractiveness for institutional investors in the value storage field, and this year's launch of Ethereum's spot ETH has become a non-impactful presence.
On the other hand, Vitalik Buterin, as the community leader, deeply influences the entire ecosystem with his rationalist temperament. Vitalik has a grand vision for Ethereum's future development, and recently he has also angrily penned 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 with current technological limitations and market expectations. At the same time, Vitalik holds too much influence in Ethereum's community governance and decision-making, which contradicts the ideals of decentralization and may lead to a decision-making process that is not democratic and dispersed, with the community's voice being intentionally or unintentionally ignored, making him seem particularly out of touch with the pursuit of wealth codes compared to everyone else.
But isn't that Vitalik Buterin? The young man who cried over Blizzard's weakening of the warlock skills and angrily entered the blockchain world to create Ethereum. If Vitalik becomes a new money shouting orders nonstop and indulging in fantasy, then perhaps that is the crisis the Ethereum community needs to worry about regarding FUD.
Dawn time
Although the rise of Meme culture and Solana has attracted a lot of attention during this cycle, it does not mean that Ethereum has not made technological innovations. Although Layer2 and Restaking may bring some challenges in the short term, they lay the foundation for the sustainable development of the Ethereum ecosystem in the long run: by reducing transaction costs and improving transaction speed, 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 the maintenance of the network, enhancing the decentralization and security of the network.
Regarding concerns about reduced ETH demand and inflation, 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 attractiveness for institutional investors in terms of value storage, Ethereum offers a more comprehensive ecosystem, including smart contracts, DeFi, NFTs, etc. Ethereum and Bitcoin are complementary in many ways, rather than a simple competitive relationship. Ethereum's versatility gives it a unique position in the cryptocurrency space, capable of supporting a wider range of application scenarios. This aspect cannot be matched by any other public chain, and the so-called 'Ethereum killers' have problems of their own, rather than being able to replace Ethereum.
Ethereum's hope lies in its continuous technological progress, a strong developer community, and its ability to adapt to the demand of emerging markets. However, in this cycle, Ethereum needs to focus on practical commercial applications that can be realized while emphasizing long-term sustainable development, allowing each commercial application to become a step towards long-termism.
Ten thousand dollars is not a dream.
The author boldly predicts that before the mid-term elections in 2026, Ethereum is expected to break through $10,000. Standard Chartered Bank analyst Kendrick reiterated the bank's price target for the end of 2025, which is $200,000 for Bitcoin and $10,000 for Ethereum.
With changes in the U.S. political landscape and Trump's support for the cryptocurrency market, a large amount of traditional capital is flowing into the cryptocurrency field. When traditional funds truly enter the crypto market, Ethereum, as a mainstream crypto asset with a spot ETF, is likely to attract more capital attention.
According to Farside Investors data, on November 12, the net inflow of Ethereum spot ETF in the U.S. was $134.4 million, creating the best historical data.
The launch of Ethereum's spot ETF provides significant financial support for Ethereum's price growth. ETF investors in traditional markets are usually long-term investors, and the liquidity of the spot ETF increases demand for Ethereum in the market. For traditional investors who already hold Bitcoin, Ethereum, with its innovative potential and ecological effects, is also one of the best channels for entering the cryptocurrency space, which will further accelerate Ethereum's transformation into a mainstream investment tool.
As for the Layer2 fragmentation issue, as the experience of Ethereum's mainnet gradually improves and competition comes to a close, we may see more L2 solutions integrated into Ethereum's mainnet. The smooth advancement of this process will provide stronger traffic support and gas fee income for Ethereum, alleviate inflation pressure, and make the economic model of the Ethereum network more robust.
It is expected that in the first half of 2025, the integration of Ethereum's L2 will gradually enter a substantial implementation phase, with some Layer2 being phased out. L2 integration will attract more developers and users back to the mainnet, thus driving the prosperity of the Ethereum ecosystem. At this stage, prices are expected to stabilize in the range of $3000 to $5000.
In the coming years, innovative applications such as PayFi and RWA are expected to continue growing, especially after the enhancement of smart contract capabilities and the gradual improvement of L2 solutions, more complex financial applications will emerge. The birth of these applications is expected to once again stimulate market demand for Ethereum.
For example, cross-chain liquidity integration based on L2, as well as 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 in the second half of 2025, these emerging applications will drive Ethereum's value to break through $6000 to $8000.
At the same time, as influential figures in the U.S. supporting cryptocurrency, such as Trump, gain more influence, it is expected that the U.S. cryptocurrency market will gradually welcome a more relaxed 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 the demand for the cryptocurrency market.
If the U.S. and other major economies gradually relax regulations on cryptocurrencies in the next 1-2 years, and global investors' demand to hedge against inflation and fiat currency depreciation increases, this will provide strong macroeconomic support for Ethereum's price increase. It is expected that in early 2026, under favorable market conditions, Ethereum may experience a large-scale price breakthrough, subsequently 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 by anyone, it cannot succeed, so from this point of view, Ethereum cannot completely become a background presence.' Ethereum's ambition is known by some.
