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- Ethereum significantly underperformed Bitcoin in 2024 with a 46.3% return versus Bitcoin’s 121.4% gain, and analysts expect this trend to continue through 2025.
- The platform’s transition to proof-of-stake has led to lower staking yields of around 3%, and the Dencun upgrade missed key market opportunities.
Ethereum’s performance in 2024 has raised significant concerns among cryptocurrency analysts, with the asset delivering a 46.3% return compared to Bitcoin’s 121.4% surge. According to Markus Thielen, the head of research at 10x Research, its active weekly addresses have been capped at 300,000 and 400,000 since their peak in May 2021, showing little ecosystem growth.
Staking Yields and Network Activity Paint Complex Picture
After shifting to proof-of-stake in September 2022, different challenges have emerged. Ethereum staking yield, which initially ranged from 5.5% to around 3% for ordinary user staking, has decreased to around 3%; some platforms like Coinbase only offered 1.99% APY.
The platform still largely failed to pledge “ultrasound money,” with only a slightly higher burn rate of ETH issued during the past two years. The growth rate of validators was negative over the past month, which may have indicated network exits, which experts claim may affect ETH prices in 2025.
Technical Upgrades Miss Market Expectations
The plan to upgrade the Dencun in March 2024 to cut transaction fees and expand the network never found the right market sentiment and came at the end of the memecoin trend. Due to the timing of this upgrade, competitors such as Solana have gained market share in the low-cost transaction space.
The start of this year’s Pectra upgrade, which is set for launch in early 2025, has raised eyebrows from analysts since only two of the nineteen upgrades made on Ethereum have positively impacted prices. The launch of U.S. Ethereum ETFs in July 2024 also failed to generate substantial interest, with inflows reaching $2.66 billion compared to Bitcoin ETFs’ $35.3 billion.
This explains why ETH’s market performance has been poor compared to BTC’s. The current realized price of ETH is $2,093, which makes pressure points for current stakers since the average deposit price for staked ETH is $2,383. At the time of this writing, Ether was trading at $3,351.
Market Performance and Analyst Ether Outlooks Remain Mixed for 2025
Some analysts are slightly more positive in their analysis. Attentant’s chief business officer, Tim Lowe, asserts that improved marketing and a tangled value proposition could entice higher demand for Ether. Besides, the cryptocurrency trader Michael van de Poppe gives the ETH/BTC ratio breakout with an indication of 0.04 for January 2025.
However, according to market signs, Ethereum will face deeper issues in the future. Weekly transactions are down from the record peak of 11 million in May 2021 to the current 9 million, and rival chains are growing. The platform’s shift towards passive staking from actively using decentralized finance applications has been criticized for the platform’s present-day utility in the crypto space.
As the cryptocurrency market moves into 2025, Ethereum’s performance is likely to be stimulated by the explicit fundamentals revealed above, coupled with the company’s capacity to respond to challenges and adjust to emerging market dynamics.
