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Ethereum, the world's second-largest cryptocurrency, has faced increasing criticism for its underperformance compared to rising rivals such as Bitcoin and Solana.
Ethereum has been the subject of social media ridicule as it trades at around $3,300, about 33% below its all-time high of $4,878 reached in November 2021.
However, analysts and investors are warning that the largest altcoin could soon emerge from recession, with some predicting it could break a record by reaching $10,000 in 2025.
Despite hovering around $3,000 for weeks, Ethereum appears poised for a change. Bitwise’s head of research, Ryan Rasmussen, hinted at renewed institutional interest:
“A $500 million asset management firm asked us to give a presentation about Ethereum to 100 asset managers today,” Rasmussen said, indicating that interest from high-level investors has increased.
Adding to the optimism, Standard Chartered analysts predict that a Republican victory led by Donald Trump in the 2024 US elections could propel Ethereum to $10,000 by 2025. A crypto-friendly administration is predicted to create favorable conditions for the sector.
Since November 5, Ethereum has gained 35%, lagging behind Bitcoin’s 45%, Solana’s 62%, and XRP’s astonishing 180% gains. Analysts attribute Ethereum’s slower progress to several factors:
- Lack of a Clear Narrative: With Bitcoin dominating the “sound money” narrative and Solana attracting attention with speed and efficiency, Ethereum has struggled to define a convincing identity.
- ETF Launch Timing: The launch of Ethereum spot ETFs in July coincided with the historically slow summer months, dampening investor excitement.
- Institutional Hesitation: Investor interest in Ethereum has decreased significantly, according to reports from Crypto Insights Group, which indicated that the investor ratio has decreased from 63% in June to 26% in recent months.
Eliezer Ndinga, head of strategy at crypto asset manager 21.co, likened Ethereum’s appeal to older technology: “Solana feels like 2G when it’s 5G.”
Ethereum’s mixed value proposition has also deterred traditional investors. Duncan Trenholme, co-head of digital assets at brokerage firm TP Icap, explained that clients often question whether Ethereum is simply “Bitcoin Lite” or why it deserves a place in portfolios.
Despite the challenges, Ethereum continues to be a major force in the crypto market, and efforts are underway to strengthen its position. Ethereum researcher Justin Drake recently outlined his proposals to increase decentralization, improve infrastructure, and protect against future quantum computing threats. In addition, traders are speculating on a price increase. Open interest in Ethereum options largely favors bullish positions, with many targeting $4,000 as a potential rally point.
*This is not investment advice.