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According to a recent report from Steno Research, Ethereum (ETH) is poised to outperform Bitcoin (BTC) by 2025. This outlook is attributed to historical trends and the expected impact of favorable cryptocurrency regulations following Republican presidential candidate Donald Trump’s victory in the November elections. .
Will 2025 be the year of Ethereum?
While the overall cryptocurrency market soared to unprecedented heights this year – with an all-time total market capitalization (ATH) of $3.9 trillion – Ethereum, the second largest cryptocurrency, has lagged behind in terms of price performance.
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However, Steno Research report suggests that Ethereum could finally reach a new ATH in 2025, driven by increased institutional investment and supportive regulatory developments. The report predicts that ETH could climb to at least $8,000 in the coming year.
Bitcoin is also expected to reach a new ATH of $150,000 by 2025, but Ethereum could more than double from its current price of $3,400. Furthermore, the ETH/BTC trading pair is expected to rise from 0.035 to 0.06 within the next twelve months.
The weekly chart below illustrates ETH’s bearish performance against BTC since September 2022. However, the pair is now hovering near a crucial support level at 0.035, with expectations of a recovery to the 0.06 level, which was last seen was seen in February 2024.
Steno Research’s bullish forecast for Ethereum underlines a potential bullish momentum for altcoins in 2025. Mads Eberhardt, an analyst at Steno Research, stated:
This expectation is partly based on the argument that Donald Trump’s US presidential victory is more favorable for altcoins than for Bitcoin.
The report adds that Bitcoin dominance (BTC.D) – a metric used to measure BTC’s share of the total crypto market capitalization – is expected to fall to just 45% from current levels.
The following weekly chart shows BTC.D’s continued uptrend since September 2022, rising from a low of around 39% to a high of 61%. However, recent price action suggests a lower high has been reached, pointing to a potential sharp decline to around 45%.
DeFi activity will rebound in 2025
The report further predicts a resurgence of decentralized finance (DeFi) activity within the Ethereum ecosystem by 2025. Specifically, the total value (TVL) in decentralized applications is expected to reach a new high of $300 billion next year.
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Renewed interest in DeFi could further drive higher altcoin prices in 2025. Particularly ETH jumped 10% after Trump’s election victory in November, as improved sentiment around DeFi regulations boosted market confidence.
Moreover, the strong inflows attracted by Ethereum Exchange Traded Funds (ETFs) will continue to increase strengthen this is a bullish argument for ETH heading into 2025. At the time of writing, ETH is trading at $3,417, up 3% in the last 24 hours.
Featured image from Unsplash, charts from Tradingview.com
