Original title: Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025
Original author: Tom Mitchelhill
Original source: https://cointelegraph.com/
Translation: Daisy, Mars Finance
Analysts and experts say that AI entities, a series of important network upgrades, and improvements in the U.S. regulatory environment are all reasons for Ethereum fans to be excited about 2025.
Ethereum supporters say that AI entities, major network upgrades, increased institutional interest, and the comprehensive regulatory reforms brought by the new U.S. President Donald Trump’s crypto-friendly government are all reasons to look forward to 2025.
Infinex founder Kain Warwick stated in an interview with Cointelegraph that although Ethereum's performance in 2024 may appear slightly flat, this asset is like a 'compressed spring' that is ready for a breakout in 2025.
According to TradingView data, as of now, ETH (Ether) has risen 53.5% year-to-date, 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 by 92.7%, 57%, and 276.5% respectively this year.
“The longer you press it, the harder it will bounce back. There are many favorable factors, as well as some constraints, but once it breaks through, people will say, ‘Wow,’” said Warwick.
Source: Kain Warwick
He mentioned several Ethereum Improvement Proposals (EIPs) and the user experience enhancements brought by these upgrades, believing these are key turning points for Ethereum and ETH price movements.
“In 2025, I believe we will see improvements in account abstraction, major progress in L2 interoperability, and a significant enhancement in 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—an important milestone on Ethereum’s roadmap expected to launch in early 2025.
Restaking platform Byzantine's co-founder and CEO Gaia Regis stated that the Pectra upgrade will fundamentally change the way Ethereum's 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 states that Ethereum has now reached a massive scale—communication among over a million Ethereum validators—which is beginning 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 and alleviating the network's pressure,” said Regis.
“Reducing pressure means a faster network and a better experience for Ethereum users.”
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, the most important of which is EIP-7702, aimed at improving user experience with wallets and chain abstraction.
“This will make staking cheaper, leading to more people participating in staking, thus gradually reducing staking rewards over time. For this reason, we have a very optimistic attitude towards restaking. Many people will hope to improve their staking rewards by securing other networks.”
Trump's crypto-friendly SEC will be particularly beneficial for ETH
Saul Rejwan, managing partner of crypto venture capital firm Masterkey, stated in an interview with Cointelegraph that Ethereum and more 'legitimate' projects in the crypto industry, particularly decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under Trump's government and a more crypto-friendly U.S. Securities and Exchange Commission (SEC).
On December 4, Trump nominated pro-crypto businessman and former SEC commissioner Paul Atkins to serve as the next SEC chairman, while current chairman Gary Gensler plans to resign on January 20.
“In a more favorable regulatory environment, DeFi projects on Ethereum will thrive, and fields like restaking only need a little regulatory push to attract institutional investors,” he said.
“We expect this new leadership will lower entry barriers, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed.”
Stablecoins, tokenization, and AI entities
Bitwise Chief Investment Officer Matt Houghan stated that Ethereum enters 2025 with three major advantages, and he expects this asset to experience a breakout 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 entities. It dominates market share in all three areas,” said Houghan.
He added, “I believe the excitement in these three areas next year will affect Ethereum, making it the comeback kid of 2025. You can already see this in the recent strong performance and ETF inflows.”
In the past two weeks, Ethereum ETF net inflows have reached $1.5 billion, becoming one of the largest periods of fund inflows 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’s leadership is particularly beneficial for Ethereum.
“I look forward to lifting the 'Sword of Damocles' that has been hanging 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 two networks,” said Houghan.
“We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this burgeoning environment.”
Houghan stated that, overall, Bitwise expects ETH to break through the previous all-time high of $4,878, reaching what he describes as a 'conservative' new high of $7,000.
More layer two networks, restaking, and better DApps
Ethereum supporter and Keyrock's Chief Marketing Officer Edu Timmers believes that the release of new layer two networks like Abstract and Deutsche Bank projects will enhance the wide adoption of the Ethereum ecosystem.
Timmers also mentioned the rise of the on-chain perpetual contract protocol Hyperliquid recently built on Arbitrum, which proves the growing dominance of Ethereum on-chain, stating he expects Ethereum and its decentralized applications (DApps) ecosystem to start competing with centralized market leaders like Binance in the new year.
“Projects like Hyperliquid will start competing with centralized players like Binance in 2025, rather than decentralized projects like Uniswap,” said Timmers.
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 may see a breakthrough.”
