Ether Could See a Strong Start in 2025
Historical data indicates that Ether (ETH) might lead a potential market rally in Q1 2025. In previous years, the first quarters following U.S. elections and Bitcoin halving cycles saw significant gains for Ether. For instance, in Q1 2017, ETH rose by 518%, and in Q1 2021, it increased by 161%. These gains even outperformed Bitcoin, which grew by 11.9% and 103.2%, respectively, during the same periods.
Growing Interest in Spot ETH ETFs
One potential driver of this growth could be spot ETFs for Ether, which recorded net inflows on 22 of the last 24 trading days. Total inflows exceeded $2.5 billion. According to Farside Investors, these funds could see over $50 billion in net inflows by 2025.
CK Zheng, Chief Investment Officer at hedge fund ZX Squared Capital, expects that new crypto-friendly regulations under the Trump administration could dramatically increase these inflows.
Cautious Outlook and Impact of Macroeconomic Conditions
Not all analysts share this optimistic view. Markus Thielen, founder of 10x Research, is more cautious in his assessment. He believes that stricter macroeconomic conditions might hinder Ethereum’s growth and predicts that ETH might not surpass its all-time high in 2025:
"We anticipate a more conservative outlook for 2025. Tight monetary policies could limit liquidity, hindering the growth of risk assets like Ether."
Macroeconomic Factors Affecting the Market
The cryptocurrency market capitalization has dropped by 12.1% to $3.41 trillion after the U.S. Federal Reserve announced in December that it would lower the number of projected interest rate cuts in 2025 from five to two. Interest rates are expected to stabilize around 3.9% in 2025, creating less favorable conditions for risk assets.
Current Prices of Bitcoin and Ether
Currently, Bitcoin is trading at $93,492, while Ether is priced at $3,997. Although ETH has risen by 0.6% in the past 24 hours, it remains 30.3% below its all-time high of $4,878 from November 2021.
Conclusion
While some analysts see opportunities for Ethereum's growth in 2025, others warn of potential slowdowns caused by unfavorable macroeconomic conditions. The future of ETH will depend not only on internal factors, such as ETF inflows, but also on global economic developments and regulatory changes.
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