Author: Anderson Sima, Foresight News
If crypto currency believers were to make a list of the most disappointing crypto assets since the beginning of 2024, Ethereum would undoubtedly top the list.
Ethereum, which once shone brightly with new applications such as DeFi and Non-Fungible Token, reached a historic high of $4,800 in the previous cycle, creating a wealth code with an increase of more than 20 times. While Bitcoin was far ahead, people's expectations for Ethereum were also at their peak.
But in the new cycle, while Bitcoin has already broken through $90,000, Ethereum has barely stood firm at the $3,000 mark. It even fell to the $2,200 mark after briefly attacking $4,000 at the beginning of the year, trapping a large number of crypto currency believers who were eagerly awaiting Ethereum. Even the "Sun Ge" who never loses money is one of them, showing that institutional investors are also not immune.
Currently, the exchange rate between Ethereum and Bitcoin has fallen to a historical low of 0.034.
As the saying goes, "When the mountains are high and the waters are deep, one doubts the way; when the willows are dark and the flowers are bright, there is another village."
Ethereum's Dilemma
The essential difference between this round of crypto currency bull market and the previous two rounds is that Ethereum has not led the technological innovation trend. Compared to the ICO craze in 2017 and the DeFi Summer in 2020, the biggest hot spot in this cycle is MEME, and the MEME community is mostly on Solana; the Layer2 and reStaking concepts led by Ethereum have actually had a certain negative impact on Ethereum's ecosystem.
Although the hundreds of Layer2 ecosystems have improved Ethereum's transaction experience and performance, they have also brought serious diversion problems; the reduced Blob fees after the upgrade have also affected Ethereum's economic model and staking income. When the demand for ETH decreases and the burning speed is lower than expected, inflation begins to appear, which also weakens its potential as a value storage.
At the same time, Bitcoin has an irreplaceable appeal to institutional investors in the field of value storage, and the Ethereum spot ETH launched this year has become a painless existence.
On the other hand, as a community leader, Vitalik's rationalist temperament has deeply influenced the entire ecosystem. Vitalik has a very grand vision for Ethereum's future development, and he has recently written several long articles to conduct various studies on Ethereum's decentralization, security, and scalability.
But from the perspective of the community, some of these goals are too idealized and have a large gap with the current technical constraints and market expectations. At the same time, Vitalik has too much influence on Ethereum's community governance and decision-making, which is contrary to the ideal of decentralization, and may lead to an undemocratic and decentralized decision-making process, where the voice of the community is intentionally or unintentionally ignored, making him seem particularly out of touch with everyone's pursuit of wealth codes.
Dawn of a New Era
Although the rise of MEME culture and Solana has attracted a lot of attention in this cycle, this does not mean that Ethereum has not made any technological innovations. Although Layer2 and reStaking may bring some challenges in the short term, in the long run, they provide a foundation for the sustainable development of the Ethereum ecosystem: by reducing transaction costs and improving transaction speed, Layer2 solutions make Ethereum more suitable for large-scale applications, which is crucial for attracting more users and developers.
Regarding the concerns about the decrease in ETH demand and the inflationary state, the Ethereum community and developers are actively seeking solutions: the community is discussing further adjustments to EIP-1559 to optimize the ETH burning and issuance mechanism.
At the same time, although Bitcoin has an attractive appeal to institutional investors in terms of value storage, Ethereum provides a more comprehensive ecosystem, including smart contracts, DeFi, Non-Fungible Tokens, etc. Ethereum and Bitcoin are complementary in many ways, not simply competitive. Ethereum's multi-functionality gives it a unique position in the crypto currency field, and it can support a wider range of application scenarios. This is something that no other public chain can match, and the so-called "Ethereum killers" are due to Ethereum's own problems, not because other public chains can replace Ethereum.
$10,000 is Not a Dream
The author boldly predicts that by the mid-term elections in 2026, Ethereum is expected to break through $10,000. Standard Chartered Bank analyst Kendrick reiterated Standard Chartered Bank's price target of $20,000 for Bitcoin and $10,000 for Ethereum by the end of 2025.
With the changes in the US political landscape and Trump's support for the crypto currency market, a large amount of traditional capital will flow into the crypto currency field. After traditional capital truly enters the crypto market, Ethereum, as a mainstream crypto asset with a spot ETF, is very likely to attract more capital attention.
According to Farside Investors data, on November 12, the net inflow of the US Ethereum spot ETF reached $134.4 million, creating the best historical data.
The launch of the Ethereum spot ETF provides important financial support for the growth of Ethereum's price. ETF investors in the traditional market are usually long-term investors, and the increased liquidity of the spot ETF has increased the market's demand for Ethereum. For traditional investors who already hold Bitcoin, Ethereum with innovation potential and ecosystem effects is also one of the best channels for them to enter the crypto currency, which will further accelerate Ethereum becoming a mainstream investment tool.
As for the Layer2 diversion problem, as the experience of the Ethereum mainnet gradually improves and the competition comes to an end, we may see more L2 solutions integrated into the Ethereum mainnet. The smooth progress of this process will provide stronger traffic support and gas fee income for Ethereum, easing inflationary pressure and making Ethereum's economic model more robust.
It is expected that in the first half of 2025, the progress of Ethereum's L2 integration will gradually enter the substantive implementation stage, some Layer2 will be eliminated, and L2 integration will attract more developers and users to return to the mainnet, thereby driving the prosperity of Ethereum's ecosystem. During this stage, the price is expected to stabilize in the range of $3,000 to $5,000.
In the next few years, innovative applications such as PayFi and RWA are expected to continue to grow, especially after the improvement of smart contract functions and the gradual improvement of L2 solutions, more complex financial applications will emerge. The birth of these applications is expected to re-ignite market demand for Ethereum.
For example, the integration of cross-chain liquidity based on L2 and the maturity of the on-chain financial derivatives market will bring a large amount of trading volume, further enhancing Ethereum's value. RWA and payments that interact with traditional assets are potential killer applications. It is expected that in the second half of 2025, these emerging applications will drive Ethereum's value to break through $6,000 to $8,000.
At the same time, as the influence of politicians such as Trump who support cryptocurrencies in the United States increases, it is expected that the cryptocurrency market in the United States will gradually usher in a relaxed regulatory environment in the future. In addition, the risk of global economic slowdown and fiat currency inflation will lead more investors to consider digital assets as a hedging tool, further increasing the demand for the cryptocurrency market.
If the United States and other major economies gradually relax the regulation of cryptocurrencies within the next 1-2 years, and the global investors' demand for hedging against inflation and fiat currency depreciation increases, this will provide a strong macroeconomic background support for the rise in the price of Ethereum. It is expected that in early 2026, under favorable market conditions, Ethereum may usher in a major price breakthrough and reach the $10,000 mark.
Recently, Vitalik was interviewed by Foresight News, and he mentioned a sentence in it, "The only surprise is that if Ethereum as an asset is not known to anyone, it cannot succeed, so from this point of view, Ethereum cannot be a completely background-like existence." Ethereum's ambition, people know.
