Key Takeaways:
Analysts predict Ethereum could surpass $5,000 in 2025, supported by historical Q1 growth and increased whale activity.
Despite the Dencun hardfork’s efforts to reduce fees, rising gas and blob costs may hinder Ethereum’s price growth and scalability.
Ethereum leads the DeFi space with a TVL of $68.22 billion, far outpacing competitors like Solana, securing its position as a blockchain leader.
Experts predict that Ethereum (ETH) could experience price growth in 2025, including during Q1, which is historically considered a green period.
Bitcoin (BTC) and many altcoins have surpassed their previous all-time highs (ATHs), but ETH has not achieved this milestone in 2024.
While BTC set multiple price records after the fall of 2024, ETH remains below its ATH of $4,878, reached on Nov. 10, 2021.
More than three years have passed since Ethereum’s last ATH. For ETH holders, 2024 has been a year of unmet expectations.
Ethereum Price Prediction: Experts Anticipate $5,000
Despite failing to break its all-time high, ETH has shown a year-to-date performance of nearly 50%, according to CoinGecko.
This growth is lower than that of Bitcoin, which increased by approximately 126%. However, Ethereum’s price returned to $3,000 and has even exceeded $4,000 on several occasions.
Decentralized finance (DeFi) researcher Minty highlighted that Ethereum has historically performed well during Q1. In January 2023, ETH’s price rose by 32.44%.
Crypto trader Phoenix predicted that ETH’s price is unlikely to surpass its ATH this year but could climb to $5,000 next year.
Additionally, whale activity has increased compared to 2023. According to CryptoQuant, Ethereum’s accumulation balance rose to 19.5 million as of Dec. 11. Whale activity often signals potential price growth.
Source: CryptoQuant
Spot on Chain reported that a whale known as “7 Siblings” purchased 28,120 ETH worth approximately $66 million as of Oct. 3. At the time, ETH’s price had dipped, allowing this large holder to acquire at an average price of $2,350.
Beyond being the second-largest cryptocurrency after Bitcoin, Ethereum remains a leading blockchain, particularly in DeFi. Despite scalability and transaction speed issues, it continues to attract new projects. Moreover, the development of Layer 2 (L2) solutions addresses these longstanding challenges.
Researcher Koryo noted that projects within the Ethereum ecosystem outperformed others over the past 30 days as of Dec. 16. Additionally, Ethereum surpassed Solana (SOL) in performance rankings, where Solana ranked near the bottom:
And post election, sol to eth eco rotation was an obvious one for those with skin in the game.
However, Ethereum’s persistent issue remains its high gas fees, which continue to challenge the project.
Is High Gas Cost Hindering Ethereum Price Growth?
Gas fees play a crucial role in the Ethereum network, as they are required to process transactions. Higher gas costs translate to increased transaction fees, raising concerns about their impact on Ethereum’s price growth.
In March 2024, Ethereum launched the Dencun hardfork with the primary goal of reducing fees for L2 networks, which had been paying significant amounts to retrieve data from Layer 1 (L1). But has it achieved its intended effect?
A key feature of Dencun was the introduction of “blobs.” In simple terms, blobs represent additional block space designed to make data exchange with L1 more affordable. L2 networks are responsible for paying for these blobs.
However, Blockworks Research reported that fees associated with blobs have risen, reaching 212 ETH as of Nov. 20. This increase implies higher costs for L2 networks.
Source: Blockworks Research
The implications are mixed. On one hand, L2 networks may migrate to cheaper alternatives, potentially affecting Ethereum’s scalability and putting downward pressure on its price.
On the other hand, Ethereum could see future profits as blobs become more integral to its network operations post-Dencun.
Data on Ethereum’s average gas costs shows a decrease following Dencun’s implementation. On Apr. 1, shortly after the hardfork, the network’s average gas cost stood at 28.4 Gwei. Six months later, on Sept. 1, this figure dropped to 2.3 Gwei, according to Etherscan.
However, Ethereum’s gas prices began rising again by autumn, alongside increasing blob costs. As of Dec. 1, the average gas price was 16 Gwei.
Source: Etherscan
Will 2025 Be a Successful Year for Ethereum?
According to Ethereum price predictions from some analysts, 2025 could be a strong year for the cryptocurrency. Some forecasts anticipate growth above $5,000.
It is worth noting that Ethereum remains one of the leading blockchains in the DeFi space, despite ongoing scalability challenges.
Data from DeFiLlama places Ethereum at the top in Total Value Locked (TVL) within decentralized finance, with $68.22 billion. For comparison, Solana ranks second with a TVL of $8.53 billion, significantly lower than Ethereum.
This suggests that Ethereum could maintain its leadership in the future.
Source: DeFiLlama
However, challenges such as high gas fees could pose issues for Ethereum in the future, potentially impacting its price.
If Layer 2 networks migrate to cheaper alternatives, Ethereum could lose key partners that currently address its scalability issues. This could lead to even higher gas prices and more expensive transactions across the network.
On the other hand, if Ethereum manages to address the rising blob costs, these mechanisms could still generate profits even at lower price points.
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