A Mixed Bag for Ethereum in 2025?
Markus Thielen, the head of research at 10x Research, has expressed some skepticism regarding Ethereum’s potential performance in 2025. According to Thielen, Ether might not be the wisest investment choice for a bull run in 2025, as the asset may deliver underwhelming returns compared to Bitcoin.
Waiting for Confirmation from Price Charts
While other analysts are waiting for more confirmation from the price charts before making any predictions about Ethereum’s future performance, Thielen is of the opinion that the asset may struggle to deliver meaningful rallies next year. He noted that while there is still a possibility of a new catalyst emerging, it is unlikely to have a significant impact on the market.
A ‘Poor’ Investment for the Medium Term
Thielen emphasized that Ethereum’s volatility, while high, remains a concern and makes it a poor medium-term investment. He expects ETH to underperform BTC once again in 2025, adding that his team’s stance on Ethereum is clear: "avoid."
Key Metrics to Watch in 2025
One of the most important metrics to watch in 2025 will be the trend in active validators. Thielen noted that the growth rate of validators has turned negative, dropping by about 1% over the past 30 days. This raises concerns about the increasing risk of more validators exiting the network.
Rise in Unstaking: A Logical Outcome?
Thielen argued that a rise in unstaking seems logical, given Ethereum’s lack of "real demand" outside of staking. However, others may not agree with this statement. Tim Lowe, chief business officer at Attestant, recently told Cointelegraph that demand for Ether can easily increase with refined marketing and a unified value proposition.
Diversification as a Catalyst
Lowe sees diversification from Bitcoin as a simple catalyst for Ethereum. He believes that with the right strategy, Ethereum can attract more investors over time.
Underperformance Against Bitcoin
While Bitcoin (BTC) is up 121.4% since January 1, 2024, Ether has clocked a 46.3% return over the same period. This underperformance against Bitcoin raises concerns about Ethereum’s ability to compete in the market.
ETF Launches and Their Impact on Demand
The launch of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024 was met with strong demand, pushing Bitcoin’s price to new highs within two months. In contrast, the launch of US Ether ETFs in July saw significantly less demand, leading to a more bearish view of the asset.
Lackluster Catalysts
Thielen is skeptical about the Duncan upgrade, which reduced network gas fees and allowed for more transactions. He believes it arrived six months too late and missed the peak of the memecoin rally. The market shifted to Solana (SOL), a more cost-effective alternative.
Pectra Upgrade: Another Uncertainty
Thielen is also uncertain about the Pectra upgrade, which is due to be introduced in early 2025. He noted that only two upgrades out of 19 have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.
Ether’s Price Outlook for 2025
While Thielen believes that Ether may continue to underperform against Bitcoin in 2025, other crypto analysts are more optimistic about the asset’s potential. Pseudonymous crypto trader Cold Blooded Shiller said in a December 31 X post that Ether has been "rangebound" since December 25 and one of two scenarios is likely to play out:
Optimistic Scenario: Sweep and Run
On the optimistic side, Ether might stage a "sweep and run" to the upside, triggering a price breakout.
Pessimistic Scenario: Breakdown
Or it could break down to the December 20 range low, potentially retesting the $3,000 level.
Uncertainty Ahead
Related to this uncertainty is the possibility that Ethereum’s price may experience significant fluctuations in 2025. While some analysts are optimistic about the asset’s potential, others are more cautious and recommend caution when investing in Ethereum.
Breakthrough or Breakdown?
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This article is for general information purposes only and is not intended to be taken as investment advice. The views expressed here are the author’s alone and do not necessarily reflect or represent the views of Cointelegraph.
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