Bitcoin may be the historical leader during bull run moments in the crypto universe, but in 2025, Ethereum (ETH) brings together a unique set of factors that can highlight it 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 scenario after the GENIUS Act, Ethereum seems ready to take on a leadership role. Just 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 surpass $4,700.00. And, as we will present in this article, there are reasons to believe that this path will continue to be upward! Stablecoins: Ethereum's strategic asset 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 have gained regulatory clarity, something the sector has been waiting for years. This new legal framework 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 institutional use of stablecoins, expanding the volume of on-chain transactions and reinforcing the liquidity available in Ethereum-based DeFi protocols. This movement not only benefits the ETH token directly but also strengthens the ecosystem of applications, decentralized exchanges, and credit and liquidity solutions that depend on these stablecoins as infrastructure. In other words, the network that hosts the largest part 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 periods of high demand. This limitation restricted use cases and pushed some users toward competing blockchains with lower fees. However, in the past 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 while maintaining the inherited security of the main layer (Layer-1). This evolution not only improves the end-user experience but also opens the door to new types of decentralized applications that were previously economically unviable. DeFi, for example, is gaining scale and efficiency, and sectors like SocialFi and GameFi find fertile ground to attract users en masse without encountering cost barriers. The accelerated adoption of L2 also means that Ethereum can compete with rival blockchains not only in terms of security and decentralization but also in speed and cost — something unthinkable a few years ago. The impact of the Dencun upgrade Another central element for the moment of Ethereum is the Dencun upgrade, implemented in 2024. With the introduction of proto-danksharding, the network has significantly reduced the cost of transactions on Layer-2 solutions, making some operations cost just a few cents. This change opens up 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 less costly interactions, decentralized exchanges increase their efficiency, and sectors like NFTs and on-chain games manage to operate with minimal fees, attracting users who were previously deterred by cost. Moreover, by eliminating one of the main competitive advantages of alternative blockchains — low transaction costs — Ethereum further strengthens its position as the market's standard infrastructure.
The regulatory 'greenlight' and the network effect The GENIUS Act has not only clarified the institutional use of stablecoins but has also strengthened the legal security for any business that wants 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 trust, combined with the vast base of developers and users already present on Ethereum, reinforces the 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.
Comparison with Bitcoin in the current cycle Bitcoin remains the main store of value in the crypto market, especially as an entry point for institutional capital through spot ETFs. However, Ethereum offers a much more versatile and programmable ecosystem. It serves not only 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 potential percentage appreciation. Additionally, ETH can be staked, allowing investors to generate passive income while remaining exposed to the asset — something Bitcoin does not offer. If BTC is the 'digital gold' of this market, Ethereum is the platform where a large part of the crypto economy actually unfolds.
Factors that could propel ETH above the market Ethereum can benefit from various simultaneous vectors: the growing demand for regulated stablecoins, the consolidation of Layer-2 solutions, the expansion of DeFi, and the emergence of new enterprise 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 a portion of transaction fees. The influx of institutional capital, both directly into ETH and into derivative products and funds using the network as infrastructure, could accelerate this movement.
Risks and challenges Despite a promising scenario, Ethereum still faces considerable risks. The competition from other L1s like Solana and Avalanche is real and could attract some liquidity. Another limiter could come from stricter regulations outside the United States, which could hinder institutional adoption, and even with recent improvements, the network must continue to evolve to maintain scalability and long-term competitiveness. That is to say: this is not a 'certain rise' (just as you should be wary whenever someone tells you something like that), there are indeed factors that could limit future potential.
ETH leading the bullish market: a plausible scenario If current trends hold, 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 substantial difference), but rather that it could offer a better relative return for investors who enter at the right time. The big catalyst will be actual usage: the more stablecoins in circulation, the more transactions will occur, and the more projects will emerge, the stronger the demand for ETH will be — 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 a foothold in the stablecoin market, Ethereum is well-positioned to lead the next bullish movement. If Bitcoin continues to be the main global store of value, Ethereum can consolidate as the infrastructure where the largest part of the crypto economy takes place. For the attentive investor, understanding this difference could be key to making the most of the 2025 cycle. Have you ever thought about all this in relation to ETH?#ETH #Bullrun #Ethereum #BTC #ETH5kNext? 