Ethereum's year-to-date gains lag behind Bitcoin and other mainstream coins, but several analysts believe that 2025 will be Ethereum's year, citing three main reasons: improved regulatory environment in the U.S., the Pectra upgrade, and the booming development of stablecoins, tokenization, and AI agents, leading the ETH/BTC exchange rate to return to an upward trend. (Background: Reducing the risk of error) The significant upgrade to Ethereum, 'Pectra', will be conducted in two phases, with the first phase launching early next year. (Additional context: Is Sun Yuchen bearish on Ethereum? Last week he transferred 40,000 ETH to exchanges, and 42,900 ETH is still being unstaked.) Year-to-date, Ethereum's performance has been underwhelming compared to most mainstream coins, having only risen 52.8%, lower than Bitcoin's 127.7%, SOL's 80.7%, and XRP's 273.3%. However, many analysts remain firmly optimistic about Ethereum, projecting that with the improved regulatory environment, significant network upgrades, and the burgeoning narratives around stablecoins, RWA, and other mainstream trends, next year will be Ethereum's year. An improved regulatory environment benefits DeFi and DePIN. Trump's successful election as President of the United States has raised high expectations in the market for improved cryptocurrency regulatory conditions, given his repeated friendly promises towards cryptocurrencies during his campaign, his family's founding of a DeFi project, and his nomination of several cryptocurrency supporters for key government positions like SEC chairman. Saul Rejwan, managing partner at crypto venture capital firm Masterkey, stated: 'The Trump administration and a more favorable SEC will benefit Ethereum and more 'compliant' crypto projects, especially in the DeFi and DePIN sectors.' He noted: 'In a more friendly regulatory environment, DeFi projects on Ethereum will thrive, and sectors like restaking only need a bit of regulatory support to attract a large number of institutional investors.' He added that the new leadership is expected to lower market entry barriers, creating a more favorable environment for innovation and growth for early crypto entrepreneurs and resilient businesses. The Pectra upgrade improves user experience. Meanwhile, the major upgrade that Ethereum supporters are looking forward to is the Pectra upgrade. Gaia Regis, co-founder and CEO of the restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change how the Ethereum security layer operates. She pointed out that the main driving force behind Ethereum staking currently comes from liquidity demand. Essentially, many ETH holders wish to participate in staking. This is usually a good thing, as more nodes imply more decentralization and higher security. However, Ethereum's current scale has become very large—communication among over one million validators is starting to slow down the network's operation. 'The solution proposed by Pectra is to increase the maximum effective balance of validators from 32 ETH to 2,048 ETH, which will significantly reduce the required number of validators, thereby alleviating network pressure. Reduced pressure means the network runs faster, providing a better user experience for Ethereum users.' She added: 'This improvement will lower the participation cost for staking, attracting more people to join staking, but it will also reduce staking rewards over time. Therefore, we are very optimistic about restaking. Many people will want to enhance staking rewards by simultaneously protecting other networks.' Kain Warwick, founder of Infinex, stated that the user experience improvements brought by Ethereum improvement proposals and network upgrades will become a key turning point for the future development of Ethereum and ETH prices. By 2025, I believe that account abstraction technology will have advanced further, L2 interoperability will significantly improve, and the user experience between L2s will see great improvements. The booming development of stablecoins, tokenization, and AI agents. Matt Houghan, Chief Investment Officer of Bitwise, stated that Ethereum has three significant advantages as it approaches 2025 and anticipates that the asset will thrive in the new year. 'Ethereum is at the core of shaping the three major trends in the 2025 crypto market: stablecoins, tokenization, and AI agents. Ethereum holds a dominant market share in all three areas.' He added: 'I believe the excitement generated by these three areas will impact ETH, making it the 'comeback star' of 2025. You can already see signs of this from recent strong performance and net inflows into ETFs.' Nate Geraci, president of ETF Store, also tweeted on December 20 that net inflows into Ethereum ETFs have reached parity with gold ETFs, while he expects inflows to begin accelerating. ETH's performance will surpass Bitcoin. Looking ahead to Ethereum's future market, Michael van de Poppe, founder of MN Capital, stated yesterday (the 24th): 'If the $ETH / $BTC exchange rate breaks above 0.04 in January, I wouldn't be surprised at all.' He anticipates that more funds will flow into Ethereum in January 2025, while Bitcoin may face outflows, leading to a consolidation phase for Bitcoin prices. This situation could spark a 'altcoin rally within the Ethereum ecosystem.' This view aligns with that of Benjamin Cowen, founder of Into The Cryptoverse, who mentioned in a December 4 post on X that he believes 'the decline in the ETH/BTC rate has ended, or is close to ending, and we should see an upward trend in the next 6 to 12 months.' As of the time of writing, the ETH/BTC exchange rate is reported at 0.03549, having risen 0.31% in the last 24 hours. ETH/BTC trend chart. Related reports: Bitcoin falls below 95,000, Ethereum loses 3,300 dollars, market risk aversion prevails this Christmas week. ETH/BTC exchange rate rebounds by 7.7%! Ten whales withdraw nearly 18,000 Ethereum, Trump family WLF adds another 2.5 million dollars. The U.S. SEC approves the first batch of 'Bitcoin + Ethereum mixed ETFs', expected to be launched in January, with huge market demand.

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