While 2024 will be a period of great growth for Bitcoin (BTC), Ethereum (ETH) has lagged behind Bitcoin during this period. While Ethereum has underperformed Bitcoin, some analysts predict that ETH will make a big leap in 2025.
However, this view has not been a consensus among all analysts.
Crypto hedge fund ZX Squared Capital’s Chief Investment Officer CK Zheng highlighted the possibility of a significant rally for Ethereum in the first quarter of 2025, based on historical data. Zheng stated that the first quarters following the US elections and Bitcoin’s halving cycle were the best performing periods for Ethereum. He gave examples of this situation in 2021 and 2017, stating that Ethereum gained 518% and 161% in value in these years, respectively.
“We expect the new Trump administration to introduce crypto-friendly regulations to further stimulate the digital asset class, and ETF applications to increase significantly in 2025. Therefore, we predict a big rally for Ethereum,” Zheng said.
However, Markus Thielen, founder of 10x Research, is taking a more cautious approach to Ethereum, predicting that ETH will underperform in 2025 due to a hawkish macroeconomic environment and decreasing liquidity.
Thielen noted that ETH will not have the chance to break a new all-time high (ATH) in 2025 by underperforming in a challenging macroeconomic environment. “We are projecting a more conservative outlook for 2025. Ethereum could be tested early this year due to hawkish policy and declining liquidity,” Thielen said, adding that the Fed funds rate could rise to 3.9% following the Fed’s December 2024 meeting, creating a more negative macro environment for risk assets like Bitcoin and Ethereum.