Markus Thielen, the head of research at 10x Research, has expressed his concerns about Ethereum’s (ETH) investment prospects for a potential bull run in 2025. According to him, ETH may deliver underwhelming returns compared to Bitcoin (BTC), making it an unwise investment choice.
Ethereum Struggles to Deliver Meaningful Rallies
While some analysts are waiting for more confirmation from the price charts before predicting the direction of Ethereum’s price, Thielen is more pessimistic. He believes that even with a new catalyst, Ethereum may struggle to deliver meaningful rallies next year.
A ‘Poor’ Medium-Term Investment?
Thielen emphasized that he and his team at 10x Research believe ETH remains a poor medium-term investment and expect it to underperform BTC once again in 2025. As a result, their stance on Ethereum is clear: "avoid."
Active Validators and Unstaking
One of the most important metrics to watch in 2025 will be the trend in active validators, Thielen noted. However, he also pointed out that the growth rate of validators has turned negative, dropping by about 1% over the past 30 days. This raises concerns about the increasing risk of more validators exiting the network.
According to Thielen, a rise in unstaking seems logical, given Ethereum’s lack of "real demand" outside of staking. However, not everyone agrees with this assessment. 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.
Diversification and ETFs
Lowe sees diversification from Bitcoin as a simple catalyst for Ethereum. However, the asset has struggled to keep pace with BTC’s performance in 2024. While Bitcoin is up 121.4% since Jan. 1, 2024, Ether has only clocked a 46.3% return over the same period, according to CoinMarketCap data.
The launch of spot Bitcoin ETFs in the United States in January 2024 was met with strong demand, helping push Bitcoin’s price to new highs within two months. In contrast, when US Ether ETFs launched in July, the demand was significantly less, leading to a more bearish view of the asset.
Upgrades and Their Impact
Thielen is also skeptical about the potential impact of upcoming upgrades on Ethereum’s price. He believes that the Duncan upgrade in March reduced gas fees but arrived six months too late, missing the peak of the memecoin rally. The market shifted to Solana (SOL), a more cost-effective alternative.
He is also uncertain about the Pectra upgrade, which is due to be introduced in early 2025. Thielen noted that only two upgrades out of 19 have had a notable positive impact on price, and even those occurred during Bitcoin bull markets.
What’s Next for Ethereum?
While Thielen expects Ether to continue underperforming against Bitcoin in 2025, other crypto analysts say the asset’s price remains uncertain. Pseudonymous crypto trader Cold Blooded Schiller said in a Dec. 31 X post that Ether has been "rangebound" since Dec. 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 Dec. 20 range low, potentially retesting the $3,000 level.
Similar scenarios have been proposed by other analysts. Pseudonymous crypto trader Dal said Ether could go in one of two directions:
- Compressing hard, he thinks if they flip 3,554 and go back to 4k, but if they can’t flip, he thinks they can sweep 3,102.
However, not everyone is bearish on Ethereum. MN Capital founder Michael van de Poppe is more optimistic, saying that he "wouldn’t be surprised if $ETH / $BTC breaks through 0.04 in January." At the time of publication, the ETH/BTC ratio — a metric showing Ether’s relative strength to Bitcoin — was 0.03571, according to TradingView data.
Conclusion
Ethereum’s future prospects for 2025 are uncertain, with some analysts predicting underwhelming returns and others expecting growth. As with any investment decision, it’s essential to conduct thorough research and consider multiple perspectives before making a choice.
