Analysts predict that Ethereum will maintain its dominance in the areas of stablecoins, tokenization, and AI, and will drive ecosystem development through innovations in restaking and layer two networks, with prices expected to break historical highs. This article is based on a piece by Tom Mitchelhill (Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025), compiled by Marsbit and organized by PANews. (Background: Bitcoin and Ethereum OTC market trading volumes soar! Institutional investment rush in) (Context: Is Ethereum staking income permanently declining? Aave integrates Chainlink SVR or rewrites the DeFi landscape) Analysts and experts indicate that AI agents, a series of significant network upgrades, and improvements in the U.S. regulatory environment are reasons for Ethereum fans to be optimistic about 2025. Ethereum supporters believe that AI intelligence, major network upgrades, increased institutional interest, and comprehensive regulatory reforms brought by the new U.S. president Donald Trump’s crypto-friendly government are all reasons for anticipation in 2025. Kain Warwick, founder of Infinex, stated in an interview with Cointelegraph that although Ethereum may perform somewhat flat in 2024, this asset is like a "compressed spring" that is ready for a breakthrough in 2025. According to TradingView data, as of now, ETH (Ether) has accumulated a 53.5% increase this year, rising from $2,350 on January 1 to the current $3,478. Meanwhile, other major crypto assets, including Solana, Cardano, and XRP from Ripple, have risen 92.7%, 57%, and 276.5% respectively this year. "The longer you compress it, the stronger the rebound will be. There are many favorable factors and some constraints, but once it breaks through, people will say, ‘Oh my God,’" Warwick said. He mentioned several Ethereum Improvement Proposals (EIPs) and the user experience enhancements these upgrades bring, believing they are 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 eagerly anticipate is the Pectra upgrade, which is 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 Ethereum's 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 since more nodes mean more decentralization and higher security," she said. However, Regis noted that Ethereum has now reached a massive scale—communication among over 1 million Ethereum validators—is starting 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," Regis said. "Less pressure means a faster network, and Ethereum users will have a better experience." In September 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 EIP-7702 being the most important, aimed at improving the user experience of wallets and chain abstraction. "This will make staking cheaper, leading to more people participating in staking, which over time will reduce staking rewards. Because of this, we have an extremely optimistic attitude towards restaking. Many people will want to increase their staking rewards by supporting other networks." Trump's crypto-friendly SEC will particularly benefit 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 the Trump administration and a more crypto-friendly U.S. Securities and Exchange Commission (SEC). On December 4, Trump nominated pro-crypto 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 will lower barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed." Stablecoins, tokenization, and AI agents Bitwise Chief Investment Officer Matt Houghan stated that Ethereum enters 2025 with three significant advantages and expects this asset to experience an explosion 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 intelligence. It dominates the market share in all three areas," Houghan said. He added, "I believe the excitement in these three areas next year will influence Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF fund inflows." In the past two weeks, Ethereum ETF net inflows reached $1.5 billion, marking one of the largest inflow periods among the eight spot funds, according to Farside Investors data. Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump will particularly benefit Ethereum. "I look forward to lifting the 'sword of Damocles' that has hung 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 two networks," Houghan said. "We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this flourishing development." Houghan stated that, overall, Bitwise expects ETH to break its previous historical high of $4,878, reaching what he describes as a 'conservative' forecast of a new high of $7,000. More layer two networks, restaking, and better DApps to...

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