Ethereum stans say AI agents, major network upgrades, increased institutional interest, and a swathe of regulatory overhauls from incoming US President Donald Trump’s crypto-friendly administration are all things to be extremely excited about in 2025.
Infinex founder Kain Warwick told Cointelegraph that while Ethereum may have suffered from a fairly mild case of underperformance in 2024, the asset is like a “coiled spring” and primed for a breakout in 2025.
Ether (ETH) has gained 53.5% year-to-date, rising from a price of $2,350 on Jan. 1 to $3,478 at the time of publication, according to TradingView data.
ETH has posted a year-to-date gain of 53.5%. Source: TradingView
Meanwhile, other major crypto assets, including Solana (SOL), Cardano (ADA) and Ripple’s XRP (XRP), posted respective gains of 92.7%, 57%, and 276.5% from the beginning of the year.
“The longer you coil it, the more it’s going to spring. There are a lot of tailwinds — and there’s also a few things holding it back — but when it does break out and people are going to say ‘oh shit,’” Warwick said.
Source: Kain Warwick
He cited a number of Ethereum Improvement Proposals (EIPs) and heightened user experience stemming from these upgrades as key turning points for Ethereum and ETH’s price action moving forward.
“In 2025, I think we’ll see account abstraction get better, L2 interoperability will get a lot better, and we’ll see the UX between L2s improve a lot as well.”
Ethereum gets Pectra upgrade in 2025
One of the main upgrades that Warwick and other Ethereum fans are keen to see is the Pectra upgrade — the next major milestone on the Ethereum roadmap, currently slated to be introduced in early 2025.
Gaia Regis, co-founder and CEO of restaking platform Byzantine, said the Pectra upgrade would fundamentally alter the way the Ethereum security layer functions.
“Right now, Ethereum staking is heavily driven by liquidity. Essentially, a lot of ETH holders want to stake. That’s generally good because more nodes means more decentralization and more security,” she said.
However, Regis said the massive scale that Ethereum has reached now — with communication occurring between more than 1 million Ethereum validators — is beginning to slow the network down.
“Pectra solves this by increasing the maximum effective balance for validators from 32 ETH up to 2,048 ETH, which drastically reduces the number of validators required and thus puts a lot less strain on the network,” said Regis.
“Less strain means a faster network and happier Ethereum users all around.”
In September, Ethereum core developers decided to split the Pectra upgrade into two main packages. The first Pectra package will introduce a total of eight EIPs, most notably EIP-7702, aimed at improving the user experience of wallets and chain abstraction.
“This will make staking cheaper, leading more people to stake and thus decreasing staking rewards over time. For that reason, we’re extremely bullish about restaking. A lot of people will want to boost their staking rewards by also securing other networks.”
Trump’s crypto-friendly SEC will be especially good for ETH
Saul Rejwan, managing partner of crypto venture capital firm Masterkey, told Cointelegraph that Ethereum and more “legitimate” projects within the crypto industry, specifically decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), stand to benefit most from a Trump administration and a more crypto-friendly Securities and Exchange Commission.
On Dec. 4, Trump tapped pro-crypto businessman and former SEC Commissioner Paul Atkins as his nominee for the next SEC chair, with current Chair Gary Gensler set to resign from the agency on Jan. 20.
“DeFi projects on Ethereum will thrive under a more favorable regulatory environment, while sectors like restaking just need a little regulatory push to hook institutional investors,” he said.
“We expect this new leadership to lower barriers to entry and make it easier for early-stage crypto entrepreneurs and resilient firms to innovate and thrive.”
Stablecoins, tokenization and AI agents
Bitwise chief investment officer Matt Houghan said Ethereum has three major things going for it heading into 2025 and expects the asset to boom in the new year.
“Ethereum sits at the center of three of the biggest trends shaping crypto in 2025: the rise of stablecoins, tokenization and AI agents. It has dominant market share in all three areas,” said Houghan.
The total market capitalization of stablecoins on Ethereum stands at $110 billion. Source: DefiLlama
“I think the excitement from these three areas next year will rub off on ETH, making it the comeback kid of 2025. You’re already seeing it in the strong recent performance and ETF flows,” he added.
In the last two weeks, Ether ETFs have generated $1.5 billion in net inflows, one of the largest periods of inflows on record for the suite of eight spot funds, per Farside Investors data.
Ethereum ETFs have witnessed over $1.5 billion in net inflows in the last two trading weeks. Source: Farside Investors
Like Rejwan, Houghan also tipped a new crypto-friendly SEC under Trump as being particularly beneficial to Ethereum.
“I’m excited for the lifting of the regulatory sword of Damocles that has hung over the US crypto industry for the past four years. A new approach in Washington is going to unleash a million entrepreneurs into crypto, and a lot of them are going to build killer apps on Ethereum and its layer 2s,” Houghan said.
“We’re entering a golden age of crypto, and Ethereum will be one of the primary beneficiaries of this blossoming.”
Houghan said that overall, Bitwise is expecting ETH to break through its previous all-time high of $4,878, reaching what he described as a “conservative” prediction of a new high of $7,000 in the new year.
More layer 2s, restaking and better DApps
Edu Timmers, an Ethereum advocate and chief marketing officer at crypto firm Keyrock, looked to the upcoming release of new layer-2 networks, including Abstract and Deutsche Bank’s project, as providing a boost to the wider utility of the Ethereum ecosystem.
Timmers also noted the recent rise of onchain perps protocol Hyperliquid, built on Arbitrum, as evidence of growing onchain dominance for Ethereum, saying he expects Ethereum and its ecosystem of decentralized applications (DApps) to begin properly competing with centralized market leaders like Binance in the new year.
“Things like Hyperliquid are starting to compete with centralized players like Binance instead of decentralized ones like Uniswap come 2025,” Timmers said.
Additionally, Timmers said Ethereum restaking was another underappreciated sector to get excited about in 2025, saying it would make the network more robust and versatile.
“Restaking could see a breakthrough as chains begin offloading security to Ethereum mainnet through solutions like EigenLayer.”
Magazine: Comeback 2025 — Is Ethereum poised to catch up with Bitcoin and Solana?
