According to 10x Research, Ether may not be the best investment choice for the anticipated bull market in 2025, despite differing opinions among analysts.
Markus Thielen, head of research at 10x Research, stated that Ether could potentially yield disappointing returns when compared to Bitcoin. Many analysts are still observing market trends to determine Ether's direction.
"While we cannot disregard the potential for new catalysts, it would not be surprising if Ethereum faces challenges in producing significant rallies next year," Thielen noted in a market report released on December 30.
Ether Labeled as a “Subpar” Medium-Term Investment
Thielen remarked, “Although we acknowledge the volatility associated with Ethereum, we consider it a suboptimal investment for the medium term and expect ETH to lag behind BTC yet again in 2025.” He emphasized, “Our clear recommendation regarding Ethereum remains: ‘avoid.’”
He pointed out that one critical metric to monitor in 2025 will be the trend in active validators. However, he highlighted a concerning trend as the growth rate of validators has recently turned negative, declining by approximately 1% over the last month. This raises alarms about the potential risk of validators leaving the network in increasing numbers.
In Thielen's view, the uptick in unstaking appears “reasonable” due to a perceived lack of "real demand" for Ethereum beyond staking activities.
Contrarily, others hold a different perspective. Tim Lowe, the Chief Business Officer at Attestant, recently indicated to Cointelegraph that the demand for Ether could surge with improved marketing strategies and a cohesive value proposition, which would naturally attract more investors over time. He believes that diversifying from Bitcoin could serve as a straightforward catalyst for Ethereum's growth.
Ether's Relative Underperformance Against Bitcoin
Data from CoinMarketCap reveals that while Bitcoin (BTC) has surged 121.4% since January 1, 2024, Ether only recorded a 46.3% return within the same timeframe. The launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. on January 11, 2024, was met with robust demand, propelling Bitcoin prices to new heights in the following months. In contrast, when U.S. Ether ETFs debuted in July, the response was significantly muted, resulting in a more pessimistic outlook for the asset.
During the year, Bitcoin ETFs attracted $35.3 billion in inflows, whereas Ether ETFs garnered only $2.66 billion.
Thielen criticized the Duncan upgrade, which occurred in March, for arriving "six months too late" as it missed the peak of the memecoin frenzy and enabled users to shift to the more cost-efficient alternative, Solana (SOL). He expressed skepticism regarding the upcoming Pectra upgrade set for early 2025.
“Out of the 19 upgrades that have taken place, only two had a substantial positive influence on prices, and those happened during Bitcoin bull markets,” Thielen remarked. He added, “The three significant Ethereum catalysts of 2024 have mostly failed to generate value.”
Thielen anticipates that Ether may continue to fall short against Bitcoin in 2025. However, some crypto analysts feel uncertain about Ether's price trajectory, suggesting it could either rise or fall.
In a recent post on X, pseudonymous crypto trader Cold Blooded Schiller indicated that Ether has remained “rangebound” since December 25, suggesting two possible outcomes: an optimistic scenario where Ether experiences a "sweep and run," triggering a price surge, or a bearish scenario where it declines to the low range of December 20, potentially retesting the $3,000 mark.
Similarly, another pseudonymous crypto trader, Dal, suggested Ether might trend in one of two directions: “If we surpass 3,554, we could see a rally back towards 4k. If we fail, a drop to 3,102 might occur,” he stated in a post on December 31.
MN Capital founder Michael van de Poppe has a more favorable outlook on Ether, indicating potential signs of a breakout against Bitcoin in January 2025. In a post dated December 24, he mentioned, “I wouldn’t be surprised if the $ETH / $BTC ratio surpasses 0.04 in January.”
At the point of publication, the ETH/BTC ratio, which reflects Ether’s strength relative to Bitcoin, stood at 0.03571 according to TradingView data.
In summary, while there are varied perspectives on Ether's future performance, caution remains the primary sentiment among several analysts as we approach 2025.
