As the crypto market enters a new year, investors are eagerly awaiting signs of a potential bull run. However, not all assets are created equal, and some analysts are sounding cautionary notes about Ethereum’s prospects for 2025.
A Skeptical View from 10x Research
Markus Thielen, head of research at 10x Research, recently shared his thoughts on Ethereum’s potential in a market report. According to Thielen, Ether might not be the wisest investment choice for a 2025 bull run, as the asset may deliver underwhelming returns compared with Bitcoin.
"While the possibility of a new catalyst cannot be ruled out, we wouldn’t be surprised if Ethereum struggles to deliver meaningful rallies next year," Thielen said. "While we appreciate Ethereum’s volatility, we believe it remains a poor medium-term investment and expect ETH to underperform BTC once again in 2025."
Thielen’s comments were echoed by other analysts, who noted that the growth rate of validators had turned negative, dropping by about 1% over the past 30 days. This trend raises concerns about the increasing risk of more validators exiting the network.
Active Validators: A Key Metric to Watch
One of the most important metrics to watch in 2025 will be the trend in active validators, Thielen noted. The current decline in validator growth rates is a concerning sign, and investors should keep a close eye on this metric as it could impact Ethereum’s overall performance.
Lack of Demand: A Major Concern
Thielen also pointed to the lack of demand for Ether outside of staking as a major concern. He argued that a rise in unstaking seems "logical," given the current market conditions. This trend could have significant implications for Ethereum’s price and overall adoption.
Attestant’s Contrarian View
However, not all analysts share Thielen’s pessimistic view on Ethereum. Attestant’s chief business officer, Tim Lowe, recently told Cointelegraph that demand for Ether can easily increase with refined marketing and a unified value proposition. Lowe sees diversification from Bitcoin as a simple catalyst for Ethereum.
"Ether underperformed against Bitcoin"
The performance of Ethereum in 2024 has been lackluster compared to Bitcoin. While Bitcoin is up 121.4% since January 1, 2024, Ether clocked a 46.3% return over the same period, according to CoinMarketCap data.
This underperformance can be attributed to several factors, including the launch of US Ether ETFs in July 2024. The demand for these ETFs was significantly less than that of Bitcoin ETFs, leading to a more bearish view of the asset.
The Duncan Upgrade: Too Little, Too Late?
Thielen also questioned the effectiveness of the Duncan upgrade, which reduced the network’s gas fees and allowed it to handle more transactions. According to Thielen, this upgrade "arrived six months too late," missing the peak of the memecoin rally.
The Pectra Upgrade: A Dubious Catalyst
Thielen is also skeptical of the Pectra upgrade, which is due to be introduced in early 2025. He noted that only two out of 19 upgrades so far have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.
A Rangebound Market: Two Possible Scenarios
Pseudonymous crypto trader Cold Blooded Schiller recently shared his thoughts on Ether’s potential in a X post. According to Schiller, Ether has been "rangebound" since December 25 and one of two scenarios is likely to play out:
- On the optimistic side, Ether might stage a "sweep and run" to the upside, triggering a price breakout.
- Or it could break down to the December 20 range low, potentially retesting the $3,000 level.
A Bullish View from Michael van de Poppe
However, not all analysts share Thielen’s pessimistic view on Ethereum. Magazine:Bitcoin payments are being undermined by centralized stablecoinsThis article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Explore more articles like thisSubscribe to the Markets Outlook newsletterGet critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every MondaySubscribeBy subscribing, you agree to ourTerms of Services and Privacy Policy
