Markus Thielen, head of research at 10x Research, has voiced concerns about Ethereum’s prospects as we move into 2025. In his report dated December 30, he highlighted that Ethereum’s returns may pale in comparison to those of Bitcoin, thus positioning it as a less attractive option for investors. Thielen pointed out a notable decline in active validators on the Ethereum network, which fell by 1% in just a month. This trend raises alarm bells regarding the potential for more unstaking and a continuing lack of demand outside of staking activities.
In 2024, Ethereum’s struggles became apparent. While Bitcoin soared with an impressive 121.4% return, Ethereum managed only 46.3%, according to CoinMarketCap. The introduction of spot Bitcoin ETFs in January brought a remarkable $35.3 billion influx, propelling Bitcoin to new heights. Conversely, Ethereum ETFs that launched in July only attracted $2.66 billion, contributing to a more bearish outlook for the asset.
Thielen didn’t hold back in critiquing Ethereum’s recent network upgrades. The Duncan upgrade in March, intended to lower gas fees and boost transaction capacity, seems to have arrived too late, failing to tap into the recent meme coin rally while platforms like Solana took the spotlight. Looking ahead, he expressed skepticism towards the forthcoming Pectra upgrade set for 2025, emphasizing that out of the 19 upgrades Ethereum has undergone, merely two significantly influenced the price, both occurring during bull runs for Bitcoin.
Despite these warning signs, not all experts share the same pessimistic view. Tim Lowe, chief business officer at Attestant, suggested that improved marketing and a cohesive value proposition might generate renewed interest in Ethereum. He believes that moving away from reliance solely on Bitcoin could help draw investors to Ethereum.
Trader opinions vary greatly. Cold Blooded Schiller, a pseudonymous trader, proposed two scenarios for Ethereum’s future: one indicating a breakout following a “sweep and run” to the upside, and another hinting at a retreat to the $3,000 range. Dal, another trader, predicted either an upward move past $3,554 heading toward $4,000 or a slide down to $3,102.
On a more upbeat note, Michael van de Poppe, founder of MN Capital, suggested that Ethereum could regain strength against Bitcoin, forecasting the ETH/BTC ratio to potentially exceed 0.04 by January 2025. As of now, this ratio stands at 0.03549, according to CoinMarketCap data.
Amidst all this speculation, Thielen maintains his stance that Ethereum is a poor medium-term investment, advising potential investors to steer clear. Presently, Ethereum trades at $3,351, and its anticipated performance continues to split the opinions of analysts and traders alike.
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