Throughout recent months, Ethereum [ETH] has lagged behind Bitcoin [BTC] and Solana [SOL], a trend attributed to what analysts have described as the ‘middle child syndrome.’
However, Matt Hougan, the CEO of Bitwise, emphasized that despite this, ETH remains the most promising investment option in the market, particularly given its pivotal role as the host platform for leading decentralized applications in the crypto space.
“At present, Ethereum stands out as the most compelling contrarian choice in the crypto sphere.”
Hougan also suggested that a significant resurgence for ETH could be anticipated by 2025.
“Throughout this year, Ethereum has been somewhat overlooked due to the intricate modifications taking place within its architectural framework. It has been overshadowed by the excitement surrounding Bitcoin and Solana. As a result, it is primed for a distinctive contrarian move in 2025.”
Challenges Confronting ETH
Following the implementation of the Dencun upgrade in March 2024, Ethereum encountered a range of responses, as the upgrade sought to enhance scalability and diminish transaction costs within Layer 2 solutions.
Yet, this transition led to a migration of network activity from the base layer to Layer 2, ultimately contributing to an increase in ETH’s inflation rate.
Upon evaluating these developments, experts began to view BTC as a more stable SoV (store of value).
This negative perception resulted in a decline in the ETH/BTC ratio to its annual lows, a metric tracking ETH’s value relative to BTC.
Similarly to Hougan’s perspective, analyst Benjamin Cowen forecasted that the ETH/BTC pair could reach a bottom in Q4 2024 before experiencing a robust recovery in 2025, aligning with historical patterns. Cowen remarked,
“The ETH/USD pair might exhibit weakness until the end of this year, drawing parallels to 2016 and 2019 (years that also witnessed a decline in the ETH/BTC ratio), but signs suggest a resurgence in 2025.”
Despite prevailing FUD (fear, uncertainty, doubt), Ethereum’s price has shown remarkable resilience amid a broader market rebound in Q4. Since early October, the altcoin has surged by almost 13%, ascending from $2.3k to $2.6k.
At the time of publication, its value stood at $2.63k, marking a 53% gap from its 2024 peak of $4k.