Analysts and experts say that AI agents, a series of important network upgrades, and an improved regulatory environment in the US are reasons for Ethereum enthusiasts to be excited about 2025.
Ethereum supporters say that AI intelligences, major network upgrades, increased institutional interest, and a crypto-friendly government under new US President Donald Trump, bringing comprehensive regulatory reform, are reasons to be excited about 2025.
Infinex founder Kain Warwick, in an interview with Cointelegraph, said that although Ethereum performed somewhat flat in 2024, this asset is like a "compressed spring" that has been prepared for a breakthrough in 2025.
According to TradingView data, as of now, ETH (Ether) has cumulatively risen 53.5% so far this year, from $2,350 on January 1 to the current $3,478.
Meanwhile, other major crypto assets including Solana, Cardano and Ripple's XRP have risen 92.7%, 57% and 276.5% respectively so far this year.
"The longer you compress it, the greater the rebound force. There are a lot of favorable factors, and some constraining factors, but once it breaks through, people will say 'wow'," Warwick said.
He mentioned some Ethereum Improvement Proposals (EIPs) and the resulting user experience improvements, which he believes are key turning points for Ethereum and the ETH price trend.
"In 2025, I think we'll see significant progress in account abstraction, L2 interoperability, and a greatly improved user experience across L2s."
Ethereum will welcome the Pectra upgrade in 2025
One of the major upgrades that Warwick and other Ethereum supporters are eagerly anticipating is the Pectra upgrade - the next major milestone on Ethereum's roadmap, expected to be launched in early 2025.
Gaia Regis, co-founder and CEO of the reStaking platform Byzantine, said the Pectra upgrade will fundamentally change the way Ethereum's security layer operates.
"Currently, Ethereum staking is mainly dependent on liquidity. Essentially, many ETH holders want to participate in staking. This is generally a good thing, as more nodes mean more decentralization and higher security," she said.
However, Regis said Ethereum has now reached a massive scale - over 1 million Ethereum validators communicating - which is starting to slow down the network.
"Pectra solves this by increasing the maximum effective balance of validators from 32 ETH to 2,048 ETH, significantly reducing the required number of validators and relieving network pressure," Regis said.
"Less pressure means a faster network and a better user experience for Ethereum users."
In September 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 of wallets and chain abstraction.
"This will make staking cheaper, leading to more people participating in staking, and over time reducing staking rewards. That's why we're very bullish on reStaking. Many people will want to increase their staking rewards by securing other networks."
Trump's crypto-friendly SEC will be particularly beneficial for ETH
Saul Rejwan, managing partner of crypto venture capital firm Masterkey, told Cointelegraph that Ethereum and more "legitimate" projects in the crypto space, particularly DeFi and decentralized physical infrastructure (DePIN), will benefit the most under a Trump administration and a more crypto-friendly US Securities and Exchange Commission (SEC).
On December 4, Trump nominated crypto-friendly businessman and former SEC commissioner Paul Atkins as the next SEC chairman, while 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 just need a little regulatory push to attract institutional investors," he said.
"We expect this new leadership to lower barriers to entry, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed."
Stablecoins, tokenization and AI agents
Matt Houghan, Chief Investment Officer of Bitwise, said Ethereum has three major advantages as it enters 2025, and expects this asset to see a breakout 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 intelligences. It dominates the market share in all three of these areas," Houghan said.
He added: "I believe that the excitement in these three areas next year will impact Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF inflows."
Over the past two weeks, Ethereum ETF net inflows have reached $1.5 billion, making it one of the largest inflow periods for the eight spot funds, according to Farside Investors data.
Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump's leadership is particularly favorable for Ethereum.
"I look forward to the removal of the 'Sword of Damocles' that has hung over the US crypto industry for the past four years. The new approach in Washington will unleash millions of crypto entrepreneurs, many of whom will build killer apps on Ethereum and its layer-2 networks," Houghan said.
"We are entering the golden age of crypto, and Ethereum will be one of the main beneficiaries of this thriving ecosystem."
Houghan stated that overall, Bitwise expects ETH to break its previous all-time high of $4,878 and reach a "conservative" new high of $7,000 as he described.
More Layer-2 Networks, Better Staking, and Improved DApps
Ethereum supporter and Chief Marketing Officer of crypto company Keyrock, Edu Timmers, believes that the release of new layer-2 networks such as Abstract and Deutsche Bank projects will enhance the widespread adoption of the Ethereum ecosystem.
Timmers also mentioned the rise of the on-chain perpetual contract protocol Hyperliquid built on Arbitrum, which demonstrates the growing dominance of Ethereum in the layer-1 space, and he expects the Ethereum and decentralized application (DApp) 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.
Furthermore, Timmers stated that Ethereum reStaking is another underestimated area worth focusing on in 2025, as he believes it will make the network more robust and versatile.
"As the chain starts to shift security to the Ethereum mainnet through solutions like EigenLayer, reStaking could see a breakthrough."
