Original Title: (Why Ethereum maxis say ETH will be the ‘comeback kid’ of 2025)
Written by: Tom Mitchelhill
Compiled by: Daisy, Mars Finance
Analysts and experts say that AI agents, 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 agents, significant network upgrades, increased institutional interest, and comprehensive regulatory reforms brought by the new crypto-friendly U.S. President Donald Trump are all reasons to be excited about 2025.
Infinex founder Kain Warwick stated in an interview with Cointelegraph that although Ethereum performed somewhat flat in 2024, 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 by 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 compress it, the harder it rebounds. There are many favorable factors, as well as some constraints, but once it breaks through, people will say 'Oh my God'," Warwick said.
Source: Kain Warwick
He mentioned some Ethereum Improvement Proposals (EIPs) and the user experience enhancements brought by these upgrades, considering them key turning points for Ethereum and ETH price trends.
"In 2025, I believe we will see improvements in account abstraction, significant progress in L2 interoperability, and a substantial 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 eagerly anticipate is the Pectra upgrade—this is the next significant milestone on Ethereum's roadmap, expected to be released in early 2025.
Gaia Regis, co-founder and CEO of the restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change how 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 stated that Ethereum has now reached a massive scale—communication among over one million Ethereum validators—which is starting 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 network pressure," Regis said.
"Reduced pressure means faster networks and a better experience for Ethereum users."
In September of this year, 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 the user experience for wallets and chain abstraction.
"This will make staking cheaper, leading to more people participating in staking, thereby reducing staking rewards over time. For this reason, we have an extremely optimistic attitude towards restaking. Many will hope to increase their staking rewards by securing other networks."
Trump's crypto-friendly SEC will particularly benefit 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, especially decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under the Trump administration and a more crypto-friendly SEC.
On December 4, Trump nominated pro-crypto businessman and former SEC Commissioner Paul Atkins to be the next SEC Chairman, while the current chairman Gary Gensler plans to resign on January 20.
"In a more favorable regulatory environment, DeFi projects on Ethereum will thrive, and areas like restaking need just a little regulatory push to attract institutional investors," he said.
"We expect this new leadership to lower the barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed."
Stablecoins, tokenization, and AI agents
Bitwise Chief Investment Officer Matt Houghan stated that Ethereum has three major advantages as it enters 2025, and he expects this asset to explode 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 agents. It dominates the market share in all three areas," Houghan said.
He added, "I believe that the excitement in these three areas next year will affect Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF inflows."
In the past two weeks, Ethereum ETF net inflows reached $1.5 billion, making it one of the largest periods of inflows among the eight spot funds, according to 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 believes that the new crypto-friendly SEC under Trump 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," Houghan said.
"We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this booming growth."
Houghan stated that overall, Bitwise expects ETH to break through its previous all-time high of $4,878, reaching what he describes as a 'conservative' predicted new high of $7,000.
More layer two networks, restaking, and better DApps
Ethereum supporter and CMO of crypto company Keyrock, Edu Timmers, believes that the launch of new layer two networks like Abstract and Deutsche Bank's projects will enhance the widespread application of the Ethereum ecosystem.
Timmers also mentioned the recent rise of the on-chain perpetual contract protocol Hyperliquid built on Arbitrum, which demonstrates the growth of Ethereum's on-chain dominance. He stated that he expects Ethereum and its decentralized application (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," Timmers said.
Additionally, Timmers stated that Ethereum restaking is another underrated area to watch in 2025, claiming it 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."
