AuthorSam Boughedda
Posted 01/07/2025, 18:21
I - Ethereum is poised to perform strongly in 2025, potentially outperforming Bitcoin, according to analysts at Compass Point Research.
In their latest blockchain and crypto newsletter, they highlight the key factors that could drive Ethereum’s growth in the coming year.
Since the recent Trump/Republican elections, both Bitcoin (BTC) and Ethereum (ETH) have seen significant gains, with Bitcoin up about 44% to $100,000 and Ethereum up 38% to $3,600.
Despite these gains, Compass Point points to the recent 13% year-end decline in Bitcoin, which led to a temporary pullback in mining stocks.
However, they expect “a strong upward recovery in hashrate prices over the next six months” as Bitcoin prices outpace the network’s hashrate growth.
The report confirms that Ethereum is set to recover again in 2025. The company said: “We continue to believe that Ethereum (ETH) is set to have a recovery year in 2025, with opportunities to buy ETH/BTC currently trading at $0.037 and down ~70% to BTC since the PoS merger in September 2022.”
Compass Point analysts believe the bounce-back year will be driven by relaxed regulations and increased clarity around smart contracts and decentralized computing platforms.
They expect significant growth in the Ethereum ecosystem, including decentralized finance (DeFi), layer 2 networks, stablecoins, and staking.
Companies like Coinbase (NASDAQ:COIN) and Galaxy Digital (TSX:GLXY) are expected to benefit from monetizing Ethereum’s growth.
“We believe that Ethereum will be one of the biggest beneficiaries of the eased regulations and clarity that will lead to the integration of decentralized computing platforms with smart contracts and ecosystems such as DeFi, Layer-2 networks, Stablecoin, Staking, and others, which we see COIN (Buy, $295 PT) and GLXY (Buy, $33 CAD) as beneficiaries in monetizing Ethereum’s growth, making it more valuable and BTC’s dominance will decline.”
