In an exclusive interview with Coinpedia, Sean Dawson, head of research at Derive, shared his perspective on the macroeconomic factors and blockchain technology shaping the cryptocurrency market, especially Ethereum's trajectory.
From changes in Federal Reserve policies to the growing role of Ethereum fund management companies, Sean clarified the factors that could be the biggest driver for cryptocurrencies in 2025.
The Fed may cut interest rates in September
Sean predicted that the Federal Reserve will lower the interest rate by 25 basis points in September, with a "95% probability according to the Fedwatch tool and about 80% on Polymarket."
He explained that the reason is due to pressures in the labor market — rising unemployment rates and weak adjusted job data, which is pushing towards a change in monetary policy.
The importance of expanding layer two solutions versus macroeconomic factors for Ethereum
When asked about the impact of upgrades like Dencun compared to macroeconomic factors, Sean said:
"The main driver behind the ETH price increase in this cycle is fund management companies like Bitmine and Ethermachine. Currently, they hold 3.6 million ETH (about 3% of the total supply), after the number was nearly zero last April."
He added that the demand for these funds is primarily driven by macroeconomic factors — especially expectations of interest rate cuts and increased U.S. government spending through what he called "the big wonderful bill," pushing investors towards high-risk assets like Ethereum bonds.
However, Sean acknowledged that layer two solutions are extremely important, as they provide a vision for a scalable online financial system, even if economic factors are the larger driver in the short term.
Ethereum is performing stronger than Bitcoin
Sean noted that Ethereum has recently shown relative strength against Bitcoin, and expects this trend to continue:
"The sudden increase in the number of Ethereum fund management companies would be a significant boost for widespread ETH adoption. I see the ETH/BTC ratio rising from the current 0.033 to 2017 levels — about 0.1 to 0.15 — by the end of this year."
Price forecasts for 2025
Bitcoin (BTC): a 50/50 chance of exceeding $150,000 by the end of the year, with a 12% chance of rising to $200,000, based on options pricing.
Ethereum (ETH): greater volatility than Bitcoin, with a 50/50 chance of reaching $6,000, and a 25% chance of hitting $8,000, especially if bond demand coincides with macroeconomic factors.
Ethereum ETF vs Bitcoin ETF in the next cycle
Sean believes it is possible — but unlikely — for the Ethereum ETF to outperform the Bitcoin ETF in terms of financial flows:
"Bitcoin is the standard digital asset. The utility of Ethereum may balance flows over time, but Bitcoin will likely remain the preferred choice for institutions."
Layer two tokens in institutional wallets
Sean does not expect layer two tokens to compete with Ethereum in institutional wallets anytime soon:
"Ethereum took years to reach its current popularity compared to Bitcoin. Layer twos are still fragmented and depend on Ethereum's value, so risk-averse institutions will continue to hold ETH."
The neglected layer one
Despite focusing on Bitcoin and Ethereum adoption, Sean noted that Solana could see growth towards the end of the cycle, especially if meme coin trading activity returns. If Solana adopts a strategy similar to treasury funds, it may mirror Ethereum's growth path.
