A Contrasting View on Ethereum’s Future Performance
Markus Thielen, the head of research at 10x Research, has expressed concerns about Ethereum’s (ETH) potential performance in the upcoming bull run. In his latest market report, dated December 30, 2024, Thielen stated that ETH may not be the best investment choice for a 2025 bull run due to its likely underwhelming returns compared to Bitcoin (BTC).
Underwhelming Returns and Lack of Catalysts
While some analysts are still waiting for more confirmation from price charts before making any predictions, Thielen’s stance is clear: "We wouldn’t be surprised if Ethereum struggles to deliver meaningful rallies next year." He emphasized that the asset may continue to underperform against BTC in 2025, citing a lack of catalysts and growing concerns about the increasing risk of validators exiting the network.
Key Metrics to Watch in 2025
Thielen highlighted two crucial metrics to monitor in 2025: the trend in active validators and the growth rate of validators. According to his analysis, the growth rate has turned negative over the past 30 days, dropping by about 1%. This development raises concerns about the sustainability of the network and its ability to handle increasing demand.
Unstaking and Validator Risks
Thielen also pointed out that a rise in unstaking seems "logical" due to Ethereum’s lack of "real demand" outside of staking. This trend could lead to more validators exiting the network, exacerbating existing issues. On the other hand, Attestant’s chief business officer, Tim Lowe, believes that refined marketing and a unified value proposition can increase demand for Ether and attract more investors over time.
Comparing Returns: Bitcoin vs. Ethereum
A closer look at historical data reveals that ETH has underperformed against BTC since January 1, 2024. While BTC is up 121.4%, ETH has clocked a mere 46.3% return over the same period. This disparity can be attributed to various factors, including the launch of spot Bitcoin exchange-traded funds (ETFs) in January and their relatively strong demand.
The Impact of Upgrades on Ethereum’s Price
Thielen also expressed skepticism about the potential impact of upcoming upgrades, such as the Duncan upgrade in March 2025. He argued that only two previous upgrades have had a notable positive effect on price, and even those occurred during Bitcoin bull markets. The Pectra upgrade, scheduled for early 2025, may not be enough to boost Ethereum’s price.
Mixed Views on Ethereum’s Future
Not all analysts share Thielen’s concerns about Ethereum’s performance in 2025. Some experts, like pseudonymous crypto trader Cold Blooded Schiller, believe that Ether has been rangebound since December 25 and is likely to either break out or retest the $3,000 level. Similarly, MN Capital founder Michael van de Poppe is more bullish on ETH and thinks it may be showing signs of breaking out relative to BTC in January 2025.
Conclusion
While some analysts are optimistic about Ethereum’s future prospects, Markus Thielen’s concerns about its potential performance in the upcoming bull run should not be dismissed. The lack of catalysts, growing validator risks, and underwhelming returns compared to Bitcoin make ETH a less appealing investment choice for many. As always, it is essential to approach such predictions with caution and conduct thorough research before making any investment decisions.
What Do You Think? Share Your Views in the Comments Below!
Sources:
- Thielen’s market report (December 30, 2024)
- Attestant’s interview with Cointelegraph
- CoinMarketCap data
- TradingView data
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