Ethereum (ETH) has risen 50% in 2024, recently surpassing $4,000 and nearing its all-time high of $4,891 from November 2021. Despite this growth, Ethereum lags behind other cryptocurrencies like Bitcoin (up 131%) and competitors such as Solana (up 88%) and Sui (up 505%). This raises the question of whether Ethereum is still a strong investment heading into 2025.
Mixed Results for Ethereum ETFs
The launch of spot Ethereum ETFs in July was expected to boost the cryptocurrency significantly. However, the impact has been underwhelming, with the largest ETF, iShares Ethereum Trust (ETHA), managing only $3.5 billion in assets compared to $53.5 billion for iShares Bitcoin Trust (IBIT). Ethereum's price has stagnated since the ETF launch, even dropping 1% despite a brief post-election rally.
Rising Competition
New blockchain platforms are challenging Ethereum’s dominance, offering faster, cheaper, and more efficient transaction processing. For example, Ethereum processes 15 transactions per second, compared to Solana’s 65,000 and Sui’s 297,000. Competitors like Cardano (up 60%) and Solana are gaining market share in decentralized finance (DeFi) and blockchain gaming, further pressuring Ethereum. Additionally, Layer-2 solutions like Arbitrum, Optimism, and Polygon have underperformed, with declines of 50% or more this year.
Ethereum’s Waning First-Mover Advantage
Ethereum’s decade-long reign as the leading smart contract platform is under threat. While its innovative past, talented leadership under Vitalik Buterin, and world-class developer network are positives, rivals have had time to close the gap.
Outlook for Investors
Ethereum remains a major blockchain player with a history of rewarding investors. However, those seeking higher growth may prefer emerging competitors like Solana or Sui. For lower risk, Bitcoin remains a reliable option with its predictable four-year growth cycles. Ethereum's status as a buy heading into 2025 is uncertain, given its mounting challenges.