Author: Tom Mitchelhill, translated by Daisy, Mars Finance.

Analysts and experts state that AI Vets, a series of important network upgrades, and the improvement of the regulatory environment in the USA are reasons for Ethereum fans to be optimistic about 2025.

Ethereum supporters indicate that AI Vets, significant network upgrades, increased Institutional interest, and the comprehensive regulatory reforms brought by the new pro-crypto US President Donald Trump are reasons for the optimism about 2025.

Infinex founder Kain Warwick stated in an interview with Cointelegraph that although Ethereum's performance in 2024 may be slightly lackluster, this Asset is like a 'compressed spring' that is ready for a breakout in 2025.

According to TradingView data, as of now, ETH (Ethereum) has accumulated a rise of 53.5% this year, increasing from $2,350 on January 1 to the current $3,478.

ETH has posted a year-to-date gain of 53.5%. Source: TradingView.

Meanwhile, other major crypto Assets, including Solana, Cardano, and Ripple's XRP, have increased by 92.7%, 57%, and 276.5% respectively this year.

'The longer you compress it, the more powerful the rebound. There are many favorable factors, as well as some constraints, but once it breaks through, people will say, 'Oh my gosh,' Warwick said.

Source: Kain Warwick

He mentioned several Ethereum Improvement Proposals (EIPs) and the user experience improvements brought by these upgrades, believing these are key turning points for Ethereum and ETH price trends.

"In 2025, I believe we will see improvements in account abstraction, significant progress in L2 interoperability, and a substantial enhancement in the user experience across L2s."

Ethereum will welcome the Pectra upgrade in 2025.

One of the major upgrades that Warwick and other Ethereum supporters eagerly anticipate is the Pectra upgrade—this is the next important milestone on Ethereum’s roadmap, expected to be launched in early 2025.

Gaia Regis, co-founder and CEO of the Restaking platform Byzantine, stated that the Pectra upgrade will fundamentally change how the Ethereum security layer operates.

"Currently, Ethereum staking mainly relies on liquidity. Essentially, many ETH holders hope to participate in staking. This is often a good thing, as more nodes mean more decentralization and greater security," she said.

However, Regis stated that Ethereum has now reached a massive scale—communication among over 1 million Ethereum validators—which is beginning to slow down the network.

"Pectra addresses this issue by increasing the maximum effective balance of validators from 32 ETH to 2,048 ETH, significantly reducing the number of validators needed and relieving pressure on the network," said Regis.

"Reduced pressure means a faster network, resulting in a better experience for Ethereum users."

In September this year, Ethereum core developers decided to split the Pectra upgrade into two main packages. The first Pectra package will introduce a total of eight EIPs, the most important being EIP-7702, aimed at improving the user experience of wallets and chain abstraction.

"This will make staking cheaper, leading to more people participating in staking, which will lower staking rewards over time. Because of this, we are extremely bullish on restaking. Many will want to enhance their staking rewards by securing other networks."

Trump's crypto-friendly SEC will be particularly beneficial for ETH.

Saul Rejwan, managing partner of crypto venture capital firm Masterkey, stated in an interview with Cointelegraph that Ethereum and more 'legitimate' projects in the crypto industry, particularly decentralized finance (DeFi) and decentralized physical infrastructure (DePIN), will benefit the most under a Trump administration and a more crypto-friendly SEC.

On December 4, Trump nominated crypto-friendly businessman and former SEC commissioner Paul Atkins to be the next SEC chairman, while current chairman Gary Gensler plans to resign on January 20.

"In a more favorable regulatory environment, DeFi projects on Ethereum will thrive, and areas like restaking only need a little regulatory push to attract institutional investors," he said.

We expect this new leadership to lower entry barriers, making it easier for early crypto entrepreneurs and resilient companies to innovate and succeed.

Stablecoins, tokenization, and AI Asia Vets.

Matt Houghan, Chief Investment Officer of Bitwise, stated that Ethereum has three major advantages as it enters 2025, and he expects this asset to experience a breakout in the new year.

Houghan said, "Ethereum is at the center of the three biggest trends in the crypto industry: the rise of stablecoins, tokenization, and AI Asia Vets. It dominates the market share in these three areas."

He added, "I believe that the excitement in these three areas next year will influence Ethereum, making it the comeback king of 2025. You can already see this in the recent strong performance and ETF inflows."

In the past two weeks, Ethereum ETF net inflows reached $1.5 billion, marking one of the largest periods of inflow among eight spot funds, according to data from Farside Investors.

Ethereum ETFs have witnessed over $1.5 billion in net inflows in the last two trading weeks. Source: Farside Investors.

Like Rejwan, Houghan also believes that the new crypto-friendly SEC under Trump is particularly beneficial for Ethereum.

I am looking forward to lifting the 'Sword of Damocles' that has hung over the USA's crypto industry for the past four years. Washington's new approach will unleash millions of crypto entrepreneurs, many of whom will build killer applications on Ethereum and its layer two networks," Houghan said.

We are entering the golden age of crypto, and Ethereum will be one of the primary beneficiaries of this flourishing growth.

Houghan stated that overall, Bitwise expects ETH to break the previous all-time high of $4,878, reaching what he describes as a 'conservative' new high of $7,000.

More layer two networks, restaking, and better DApps.

Edu Timmers, Chief Marketing Officer of the crypto company Keyrock and an Ethereum supporter, believes that the launch of new layer two networks like Abstract and Deutsche Bank projects will enhance the broad application of the Ethereum ecosystem.

Timmers also mentioned the rise of the on-chain perpetual contract protocol Hyperliquid, built on Arbitrum, proving the growth of Ethereum's on-chain dominance. He stated that he expects Ethereum and its decentralized applications (DApps) ecosystem to begin competing with centralized market leaders like Binance in the new year.

Projects like Hyperliquid will start competing with centralized players like Binance in 2025, rather than decentralized projects like Uniswap," Timmers said.

Additionally, Timmers mentioned that Ethereum restaking is another undervalued area to watch in 2025, claiming that this will make the network more robust and versatile.

As the chain begins to transfer security to the Ethereum mainnet through solutions like EigenLayer, re-staking may usher in a breakthrough.