Positive Factors

• Technical Upgrades: Ethereum 2.0 introduces a Proof of Stake (PoS) consensus mechanism, enhancing energy efficiency and security, while significantly improving transaction speed and reducing the risk of network congestion. Additionally, Layer 2 solutions like state channels and sidechains can offload some transactions for off-chain processing, improving network capacity and reducing transaction costs, attracting more users and developers.

• Market Demand Growth: Decentralized finance (DeFi) applications are rapidly rising on Ethereum, providing transparent financial services that do not require third-party trust, with huge market demand. Moreover, Ethereum supports the development of applications across multiple fields, including supply chain management, digital asset issuance, gaming, and art trading. The NFT boom has especially made Ethereum the preferred platform for creating, trading, and storing NFTs, all of which will drive continuous growth in Ethereum's market demand.

• Active Community Ecosystem: The Ethereum community has a large and widely distributed developer team dedicated to developing new DApps and smart contracts, enriching its functions and application scenarios. The community also promotes member communication and cooperation in various ways, which helps experts from different fields learn from each other's experiences and promotes the healthy development of the ecosystem.

Challenges and Risks

• Competitive Pressure: The blockchain field is highly competitive, with rivals such as BNB Chain, Solana, and Avalanche having certain advantages in processing speed and transaction fees, which may attract some users and developers, posing a threat to Ethereum.

• Regulatory Uncertainty: As the cryptocurrency market develops, regulatory attention is increasing. Ethereum's PoS model may face securities regulatory discussions in some jurisdictions. Although it has a high degree of decentralization, the global regulatory environment is complex and ever-changing, and compliance still has certain uncertainties.

Some analysts are optimistic about Ethereum's future price performance, expecting it to possibly break through the range of $5,000 to $6,200 by 2025, and there is even a possibility of retesting the historical high. In the long term, there are views that Ethereum has the potential to increase by 80 times in the next 10 years, but this requires Ethereum to continue innovating and improving, addressing various challenges, and maintaining good cooperation with regulatory agencies.