In 2024, Ethereum (ETH) traded below $3,400, despite a 43% increase in value. While Ethereum (ETH) remains crucial to the cryptocurrency ecosystem, its price performance has lagged behind Bitcoin (BTC) and rising competitors such as Solana (SOL).
Ethereum faces upcoming challenges.According to Markus Thielen, head of research at 10x Research, Ethereum’s medium-term investment potential appears to be modest. Thielen expects ETH to lag Bitcoin again in 2025, citing low demand beyond staking and declining validator growth. Validator activity has decreased by 1% in the past month, raising concerns about the network’s stability and future prospects.
Ethereum’s reliance on staking has been another source of dispute. While staking generates an annual revenue of roughly 2.8%, detractors claim that the network lacks broader utility. “Unstaking appears rational,” Thielen said, citing a potential exodus of validators if demand does not increase.
Market sentiments and upgradesEthereum is also facing criticism for its upcoming Pectra update, scheduled for early 2025. According to historical data, just a few of Ethereum’s 19 upgrades have had a significant influence on price, with gains typically happening during bigger Bitcoin bull markets.
Ethereum announced the Duncan upgrade in 2024, which sought to reduce gas fees while increasing transaction throughput. However, the improvement arrived too late to profit on the memecoin boom, as market interest shifted to more affordable options such as Solana.
Competing PerspectivesNot every analyst shares Thielen’s pessimism. Some believe that Ethereum could benefit from diversification methods and improved marketing to attract new investors. Attestant’s Chief Business Officer, Tim Lowe, believes that better marketing and a cohesive value offer might help Ethereum regain momentum.
Additionally, crypto trader Michael van de Poppe has a more bullish outlook, predicting that ETH/BTC would strengthen in early 2025. He sees a potential breakout if ETH breaks critical resistance levels.
Ethereum’s 2025 OutlookA variety of factors, including upgrade success, market trends, and network demand, will determine Ethereum’s performance. While some perceive it as a passive income source for whales, others see limitless potential for expansion.
As Ethereum faces these issues, the cryptocurrency community remains divided about its future. Will 2025 be a tipping point, or will Ethereum continue to underperform Bitcoin? Investors and enthusiasts alike will pay close attention.
