Ether's Potential Q1 2025 Rally Amid Macro Challenges
According to Cointelegraph, Ether (ETH) could potentially lead a market rally in the first quarter of 2025, reminiscent of its strong performances in Q1 2017 and Q1 2021, where it surged by 518% and 161%, respectively. These gains surpassed Bitcoin's (BTC) returns of 11.9% and 103.2% during the same periods, as per Coinglass data. The anticipation of a rally is partly fueled by the inflows into spot Ether exchange-traded funds (ETFs), which have seen significant activity with over $2.5 billion in net inflows over 22 of the last 24 trading days. Some industry experts, like those from Farside Investors, are optimistic, predicting that Ether ETFs could attract over $50 billion in net inflows by 2025.
However, the outlook is not unanimously bullish. Markus Thielen, founder of 10x Research, offers a more cautious perspective, suggesting that Ether might underperform in 2025 due to a "hawkish" macroeconomic climate. He notes that the Federal Reserve's recent decision to reduce the number of projected interest rate cuts for 2025 could create a less favorable environment for risk-on assets like Ether and Bitcoin. The federal funds rate is now expected to stabilize near 3.9% in 2025, higher than the previously anticipated 3.4%, which could dampen market momentum. Despite these challenges, Thielen still sees potential for Bitcoin to reach $160,000 in an optimistic scenario, although he expects it to stabilize around $125,000.
Currently, Bitcoin is trading at $93,492, while Ether is priced at $3,997, reflecting a 0.6% increase over the last 24 hours but still down 30.3% from its all-time high of $4,878 in November 2021, according to CoinGecko data. The broader crypto market has also experienced a pullback, with the market cap decreasing by 12.1% to $3.41 trillion following the Federal Reserve's policy adjustments. As the market navigates these macroeconomic challenges, the potential for Ether to lead a Q1 2025 rally remains contingent on various factors, including regulatory developments and market liquidity conditions.