Is Ethereum a Smart Bet for 2025? Analysts Are Divided

Will ETH Shine or Struggle?

With crypto bulls eagerly anticipating 2025, one pressing question lingers: Will Ethereum (ETH) finally have its moment, or will it once again play second fiddle to Bitcoin (BTC)? According to Markus Thielen, head of research at 10x Research, Ethereum’s outlook for 2025 isn’t the most promising.

While some investors are optimistic, Thielen argues that ETH may underperform Bitcoin, lacking the catalysts needed for significant growth. But not everyone agrees. Let’s break down what analysts are saying and what it means for your crypto investments.

Is Ethereum a Weak Medium-Term Investment?

Thielen isn’t mincing words when it comes to Ethereum’s potential.

“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.”

His stance is clear: Ethereum lacks immediate catalysts that could spark a strong rally. The biggest red flag? A declining number of active validators. Over the past 30 days, the growth rate of validators has actually turned negative—dropping by about 1%—which suggests that more validators may be exiting the network.

Ethereum Validators Chart
Ethereum active validators vs. 1-month change in validators. Source: 10x Research

Thielen attributes part of this to a rise in unstaking, citing a lack of “real demand” for ETH outside of staking. But not all analysts agree with that view.

Tim Lowe, Chief Business Officer at Attestant, sees marketing as Ethereum’s missing piece. He believes that with better messaging and a clearer value proposition, demand for ETH could increase organically.

Bitcoin vs. Ethereum: The 2024 Performance Gap

Looking at raw performance numbers, it’s hard to argue with the Bitcoin crowd. Since January 1, 2024, BTC has surged 121.4%, while ETH has managed a much more modest 46.3%.

A big reason for Bitcoin’s outperformance? The launch of U.S. spot Bitcoin ETFs in January 2024. Strong institutional demand propelled BTC to new highs within just two months. However, when Ethereum’s spot ETF debuted in July, it failed to generate the same enthusiasm.

Comparing ETF Inflows:

• Bitcoin ETFs (2024): $35.3 billion
• Ethereum ETFs (2024): $2.66 billion

For Thielen, these numbers indicate that investors are prioritizing Bitcoin over Ethereum. Even Ethereum’s Dencun upgrade in March 2024—designed to reduce gas fees and improve transaction processing—had minimal impact on ETH’s price momentum.

Upcoming Ethereum Upgrades: Will They Matter?

Ethereum has another major upgrade, Pectra, set for early 2025. But Thielen remains unconvinced:

“Of the 19 upgrades so far, only two have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.”

Simply put, Ethereum’s technical improvements haven’t been translating into price growth in the way investors hoped.

A Divided Market: Analysts Offer Conflicting Predictions

The big question remains: will ETH finally take off in 2025, or will it remain overshadowed by Bitcoin? Some traders believe there’s potential for a reversal.

Possible Scenarios for ETH Price Movement:

🚀 Bullish Case — Crypto trader Cold Blooded Schiller suggests ETH might experience a breakout if it successfully pushes past its current resistance levels.

📉 Bearish Case — If ETH fails to maintain support, it could dip back toward the $3,000 range.

Meanwhile, Michael van de Poppe, founder of MN Capital, is more optimistic. He predicts that ETH/BTC could break the 0.04 level in January 2025—a sign that Ethereum might gain strength relative to Bitcoin.

At the time of writing, the ETH/BTC ratio stood at 0.03571.

The Bottom Line

For now, Ethereum’s trajectory remains uncertain. While Bitcoin’s strength is undeniable, Ethereum continues to have strong development activity and institutional interest, even if price action has lagged.

So, should investors “avoid” ETH, as Thielen suggests? Or is now the perfect time to accumulate before a potential breakout?

One thing’s for sure—2025 will be a make-or-break year for Ethereum. Whether it thrives or stumbles will depend on market sentiment, investor confidence, and its ability to prove real-world utility beyond staking.

🔹 What do you think? Will Ethereum surprise us in 2025? Share your thoughts in the comments!