Bitcoin may be the historical leader of bull run moments in the crypto universe, but in 2025, Ethereum (ETH) brings together a set of unique factors that may position it ahead as the protagonist of the cycle.

From the advancement of regulated stablecoins to the evolution of Layer-2 solutions, through technical updates and a clearer regulatory landscape after the GENIUS Act, Ethereum seems ready to take on a leadership role.

From the end of the first half of July to the end of the first half of August 2025, ETH rose from around $3,000.00 to cross $4,700.00. And, as we will present to you in this article, there are reasons to believe that this path will continue to ascend!

Stablecoins: Ethereum's strategic trump card

Ethereum is home to most of the market's stablecoins, including USDC and USDT in its ERC-20 version.

With the approval of the GENIUS Act in the United States, these stablecoins gained regulatory clarity, something the sector had been waiting for years. This new legal basis represents a profound change for the market, as it allows financial institutions, funds, and companies to operate with these assets without the legal uncertainty that previously kept some institutional capital away.

This legalization tends to increase the institutional use of stablecoins, expanding the volume of on-chain transactions and strengthening the liquidity available in DeFi protocols based on Ethereum.

This movement benefits not only the ETH token directly but also reinforces the ecosystem of applications, decentralized exchanges, and credit and liquidity solutions that rely on these stablecoins as infrastructure.

In other words, the network that hosts the majority of the market's regulated liquidity is in a position to reap the benefits of this legal advancement.

Layer-2: scalability and competitiveness

Historically, one of the biggest criticisms of Ethereum has always been the high cost of transactions during times of high demand. This limitation restricted use cases and pushed some users to competing blockchains with lower fees. However, in the last two years, Layer-2 solutions have radically changed this scenario.

Networks like Arbitrum, Optimism, Base, and zkSync offer much lower transaction fees and high speed, maintaining the inherited security of the main layer (Layer-1). This evolution not only improves the end-user experience but also opens the door for new types of decentralized applications that were previously economically unviable.

DeFi, for example, gains scale and efficiency, and sectors like SocialFi and GameFi find fertile ground to attract mass users without hitting cost barriers.

The accelerated adoption of L2 also means that Ethereum can compete with rival blockchains not only in security and decentralization but also in speed and cost — something unthinkable just a few years ago.

The impact of the Dencun upgrade

Another central element for Ethereum's moment is the Dencun upgrade, implemented in 2024. With the introduction of proto-danksharding, the network significantly reduced the cost of transactions in Layer-2 solutions, leading some operations to cost only fractions of a cent.

This change opens a range of possibilities for use cases that depend on micropayments or frequent transactions, making previously impractical business models viable.

The practical effect of this is that the entire ecosystem becomes more competitive. DeFi protocols start offering cheaper interactions, decentralized exchanges increase efficiency, and sectors like NFTs and on-chain games can operate with minimal fees, attracting users who were previously deterred by costs.

Furthermore, by eliminating one of the main competitive advantages of alternative blockchains — low transaction costs — Ethereum further strengthens its position as the standard infrastructure of the market.

The regulatory 'greenlight' and the network effect

The GENIUS Act not only provided clarity for the institutional use of stablecoins but also reinforced legal security for any company wishing to build on Ethereum. The natural consequence is that more traditional companies feel comfortable integrating on-chain solutions into their products and services.

This institutional confidence, combined with the enormous base of developers and users already present on Ethereum, enhances the so-called network effect. The more liquidity, applications, and users a network has, the more attractive it becomes for new participants, creating a growth cycle that is difficult to replicate by competitors.

Comparing with Bitcoin in the current cycle

Bitcoin continues to be the main store of value in the crypto market, especially as an entry point for institutional capital via spot ETFs. However, Ethereum offers a much more versatile and programmable ecosystem. It not only serves as an investment asset but also as infrastructure for stablecoins, DeFi protocols, NFTs, DAOs, and various other applications.

This multifunctionality gives Ethereum an advantage in terms of percentage appreciation potential. Additionally, ETH can be staked, allowing investors to earn passive income while remaining exposed to the asset — something that Bitcoin does not offer.

If BTC is the 'digital gold' of this market, Ethereum is the platform where a significant part of the crypto economy truly happens.

Factors that could drive ETH above the market

Ethereum can benefit from several simultaneous vectors: the growing demand for regulated stablecoins, the consolidation of Layer-2 solutions, the expansion of DeFi, and the arrival of new corporate use cases.

It is also relevant to mention long-term narratives, such as the reduction of net ETH issuance after the transition to proof-of-stake and the potential deflationary effect brought by EIP-1559, which burns part of the transaction fees.

The entry of institutional capital, both directly into ETH and into derivative products and funds that use the network as infrastructure, can accelerate this movement.

Risks and challenges

Despite the promising scenario, Ethereum still faces considerable risks. The competition from other L1s like Solana and Avalanche is real and may attract some liquidity.

Another limiting factor may come from stricter regulations outside the U.S., which could serve as a brake on institutional adoption, and even with recent improvements, the network needs to continue evolving to maintain scalability and long-term competitiveness.

That is: it is not a 'sure high' (just as you should be wary every time someone tells you something like that), there are indeed factors that can limit future possibilities.

ETH leading the bull market: a plausible scenario

If current trends continue, Ethereum may not only keep pace with Bitcoin but also outperform it in percentage performance in this cycle. This does not mean it will immediately surpass BTC in market value (especially since there is a considerable difference), but rather that it may offer greater relative return for investors who enter at the right moment.

The great catalyst will be real usage: the more stablecoins circulate, the more transactions occur and the more projects emerge, the greater the demand for ETH — both for use and for staking.

2025 is already the year of Ethereum

With unprecedented regulatory clarity, reduced costs after Dencun, accelerated expansion of Layer-2 solutions, and dominance in the stablecoin market, Ethereum is in a privileged position to lead the next bull movement.

If Bitcoin continues to be the main global store of value, Ethereum could consolidate as the infrastructure where most of the crypto economy occurs. For the attentive investor, understanding this difference could be the key to maximizing the 2025 cycle.

Have you thought about all this in relation to ETH?

#ETH #Bullrun #Ethereum #BTC #ETH5kNext?

---

Photo available on Freepik