As the new year begins, investors are eager to know whether Ethereum (ETH) will continue its underwhelming performance against Bitcoin (BTC) in 2025. Markus Thielen, head of research at 10x Research, recently shared his thoughts on ETH’s prospects in a market report.
A Poor Investment for the Medium Term
According to Thielen, Ether might not be the wisest investment choice for a 2025 bull run, as the asset may deliver underwhelming returns compared with Bitcoin. He noted that while Ethereum’s volatility is notable, it remains a poor medium-term investment and expects ETH to underperform BTC once again in 2025.
"We appreciate Ethereum’s volatility, but we believe it remains a poor medium-term investment and expect ETH to underperform BTC once again in 2025," Thielen said. "As a result, our stance on Ethereum remains clear: ‘avoid.’"
Active Validators: A Key Metric to Watch
One of the most important metrics to watch in 2025 will be the trend in active validators, according to Thielen. However, he noted that the growth rate of validators had turned negative, dropping by about 1% over the past 30 days, raising concerns about the increasing risk of more validators exiting the network.
Unstaking: A Logical Outcome
Thielen also suggested that a rise in unstaking seems "logical," arguing that Ethereum lacks "real demand" outside of staking. This could lead to a decrease in active validators and potentially impact the network’s overall performance.
Others, however, may not agree with Thielen’s statement. Attestant’s chief business officer, Tim Lowe, recently told Cointelegraph that demand for Ether can easily increase with refined marketing and a unified value proposition, which would naturally see it accrue more investors over time.
Diversification from Bitcoin: A Catalyst for Growth
Lowe sees diversification from Bitcoin as a simple catalyst for Ethereum. He believes that if investors become interested in ETH as an alternative to BTC, its price could rise significantly.
Ether Underperformed Against Bitcoin in 2024
In 2024, Bitcoin saw significant growth, with prices increasing by 121.4% since January 1st. In contrast, Ether’s return was only 46.3% over the same period, according to CoinMarketCap data.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024 was met with strong demand, helping push Bitcoin’s price to new highs within two months. However, when US Ether ETFs launched in July, the demand was significantly less, leading to a more bearish view of the asset.
The Duncan Upgrade: A Missed Opportunity
Thielen also expressed skepticism about the Duncan upgrade, which reduced the network’s gas fees and allowed it to handle more transactions. He argued that the upgrade arrived six months too late and missed the peak of the memecoin rally.
The Pectra Upgrade: Another Potential Disappointment
Additionally, Thielen is skeptical of the Pectra upgrade, which is due to be introduced in early 2025. He noted that only two upgrades out of 19 have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.
Ethereum Catalysts: A Mixed Bag
Thielen also stated that the three major Ethereum catalysts of 2024 – including the Duncan and Pectra upgrades – have largely fallen flat, adding little value overall.
A Rangebound Market Ahead?
Pseudonymous crypto trader Cold Blooded Schiller recently shared his thoughts on Ether’s prospects in a Dec. 31 X post. He noted that Ether has been "rangebound" since December 25 and one of two scenarios is likely to play out:
- On the optimistic side, Ether might stage a "sweep and run" to the upside, triggering a price breakout.
- Or it could break down to the downside, potentially impacting its price.
A Breakthrough in ETH/BTC Ratio?
Another analyst, Magazine, recently suggested that Ethereum’s relative strength against Bitcoin – measured by the ETH/BTC ratio – could rise significantly in 2025. The current ratio is 0.03571, according to TradingView data.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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