Ethereum Set to Close the Year with a 50% Return, Poised for Catalysts in 2025

Ethereum (ETH) has been consolidating near $3,400, poised to close the year with an approximate 50% return. Despite underwhelming gains compared to Bitcoin and other top 20 tokens by market capitalization, the narrative could change in 2025 with several catalysts on the horizon.

Ethereum Gears for Pectra Upgrade in 2025

The upcoming Pectra upgrade is expected to go live in 2025, introducing enhancements in account abstraction, validator operations, and network performance. The goal is to improve both the user and developer experience on Ethereum, making future scalability upgrades easier to implement. Validator stake limits, staking withdrawals, and streamlined smart contract development could improve Ethereum’s network security and efficiency, having a positive impact on Layer 2 chains that rely on Ethereum for their security infrastructure.

The Pectra upgrade is expected to be the third most significant upgrade in the Ethereum ecosystem after the Merge, and its successful execution could act as a catalyst for Ether’s recovery in 2025. Ethereum analyst Anthony Sassano estimates that the Pectra upgrade will go live in March or April 2025.

We’re getting a blob increase to 6/9 from 3/6 with Pectra in March/April (my estimate).

Institutional Investors Accumulate Ether During Dips

On-chain data intelligence platform Santiment shows a consistent increase in supply held by top non-exchange wallet addresses and the token’s top addresses as a percentage of total supply. This indicates that large wallet investors are accumulating Ether, a typically bullish indicator for ETH. Entities like World Liberty Financial, backed by Donald Trump, have bought Ether tokens during the dips in ETH price.

US-Based Spot Ethereum ETFs Could Pass on Staking Yield

Several U.S.-based spot Ethereum ETFs have been approved by the SEC, but none currently include yield from staking. However, pro-crypto regulations under President-elect Donald Trump could pave the way for investors to increase returns through ETH staking rewards. ETF issuers could benefit from staking rewards via an increased NAV, reduced management fees, and dividends.

Higher Adoption Among Institutions, Outside of Token Utility

Dario Lo Buglio, CTO at Brickken, notes that Ethereum’s value lies not only in its financial use cases but also in its smart contracts, which can be used for programming applications. Lo Buglio remains optimistic about Ethereum’s adoption among institutions for its smart contract functionality and underlying technology.

There is one thing people should remember about Ethereum, it not only has financial use cases like Bitcoin, it has smart contracts. It can be used for programming applications and there must be a balance between Ethereum value and its utility as a form of payment and decentralized applications.

Technical Analysis and Targets

Ethereum hovered around $3,400 on December 31. The coin faces resistance at $3,497 and finds support in the fair value gap between $3,159 and $3,257. Technical indicators support a bullish outlook for Ether, with the relative strength index reading 46 and slopes upward, indicating positive underlying momentum.

Traders should watch closely for a potential reversal in Ethereum’s price trend. The target for Ether is $4,500, with psychologically important support at $3,000.

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