Original title: (Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025)
Written by: Tom Mitchelhill
Compiled by: Daisy, Mars Finance
Analysts and experts say that AI agents, a series of important network upgrades, and the improvement of the U.S. regulatory environment are reasons why Ethereum fans are excited about 2025.
Ethereum supporters say that AI agents, major network upgrades, increased institutional interest, and the comprehensive regulatory reform brought by the new crypto-friendly U.S. President Donald Trump are all reasons to be excited about 2025.
Infinex founder Kain Warwick stated in an interview with Cointelegraph that although Ethereum's performance may seem somewhat lackluster 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 risen 53.5% year-to-date, climbing from $2,350 on January 1 to the current $3,478.
ETH has posted a year-to-date gain of 53.5%. Source: TradingView
Meanwhile, other major crypto assets, including Solana, Cardano, and Ripple's XRP, have risen 92.7%, 57%, and 276.5% respectively this year.
‘The longer you compress it, the more forcefully it will bounce back. There are many favorable factors and some constraints, but once it breaks through, people will say, ‘Wow,’’ Warwick said.
Source: Kain Warwick
He mentioned several Ethereum Improvement Proposals (EIPs) and the user experience enhancements brought by these upgrades, considering them 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 greatly improved user experience between L2s.’
Ethereum will welcome the Pectra upgrade in 2025.
One of the major upgrades that Warwick and other Ethereum supporters are eagerly anticipating is the Pectra upgrade—this is the next significant milestone on Ethereum's roadmap, expected to be launched in early 2025.
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.
‘Currently, Ethereum staking mainly relies on liquidity. Essentially, many ETH holders want to participate in staking. This is usually a good thing because more nodes mean more decentralization and higher security,’ she said.
However, Regis stated that Ethereum has now reached a huge scale—communication among over one million Ethereum validators—which 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, thus easing the pressure on the network,’ Regis said.
‘Less pressure means a faster network and a better experience for Ethereum users.’
In September of 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, the most important of which is EIP-7702, aimed at improving the user experience of wallet and chain abstraction.
‘This will make staking cheaper, leading to more people participating in staking, thus lowering staking rewards over time. For this reason, we are extremely optimistic about restaking. Many will want to increase their staking rewards by securing other networks.’
Trump's crypto-friendly SEC will particularly benefit ETH.
Saul Rejwan, managing partner of the crypto venture capital firm Masterkey, stated in an interview with Cointelegraph that Ethereum, as well as 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 SEC.
On December 4th, Trump nominated crypto-friendly businessman and former SEC Commissioner Paul Atkins to serve as the next SEC chair, while current chair 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 to lower the 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 major 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 agents. It dominates the market share in all three areas,’ Houghan said.
He added, ‘I believe that the excitement in these three areas will impact Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF inflows.’
In the past two weeks, Ethereum ETF net inflows reached $1.5 billion, making it one of the largest inflow periods among eight spot funds, according to data from Farside Investors.
Ethereum ETFs have witnessed over $1.5 billion in net inflows in the last two trading weeks. Source: Farside Investors
Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump is particularly beneficial for Ethereum.
‘I look forward to the lifting of 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 2 networks,’ Houghan said.
‘We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this thriving development.’
Houghan stated that overall, Bitwise expects ETH to break its previous all-time high of $4,878, reaching what he describes as a 'conservative' predicted new high of $7,000.
More layer 2 networks, restaking, and better DApps.
Ethereum supporter and Chief Marketing Officer of crypto company Keyrock, Edu Timmers, believes that the release of new layer 2 networks like Abstract and Deutsche Bank projects will enhance the widespread application of the Ethereum ecosystem.
Timmers also mentioned the rise of Hyperliquid, an on-chain perpetual contract protocol built on Arbitrum, as evidence of Ethereum's growing dominance on-chain. He stated that he expects Ethereum and its decentralized applications (DApps) ecosystem to begin competing with centralized market leaders like Binance in the new year.
‘Projects like Hyperliquid will begin competing with centralized players like Binance in 2025, rather than decentralized projects like Uniswap,’ Timmers said.
Additionally, Timmers stated that Ethereum restaking is another undervalued area worth watching in 2025, claiming this will make the network more robust and versatile.
‘As chains begin to transfer security to the Ethereum mainnet through solutions like EigenLayer, restaking could see a breakthrough.’
