James Richardson
Ether’s price could soar to $12,000 this year, representing a 257% increase from its current valuation, according to Dr. Sean Dawson, head of research at the decentralized finance options protocol Derive. Key factors driving this potential surge include Donald Trump’s presidency and the upcoming Ethereum Pectra upgrade.
Scheduled for release in the first quarter of 2025, the Pectra upgrade is expected to significantly enhance Ethereum’s scalability and efficiency. Dr. Dawson highlighted that Ether must achieve broader adoption through real-world assets (RWAs), increased exchange-traded fund (ETF) inflows, and expanded applications in emerging sectors such as decentralized physical infrastructure (DePIN) and AI agents.
Matt Hougan, head of research at Bitwise, emphasized that Ethereum and its layer-2 scaling network, Base, are becoming hubs for AI agent operations, further bolstering its utility.
Favorable Regulatory Environment Under Trump Administration
Dawson also noted that a crypto-friendly regulatory landscape under the Trump administration could fuel Ether’s growth. Enhanced interoperability in layer-2 solutions is another critical factor that could drive significant gains for Ethereum.
While Ether has hovered around $3,500 since December, Dr. Dawson pointed out that the options market paints a more optimistic picture.
“On Derive.xyz, there is a pronounced skew toward call options, with 250% more calls in open interest compared to puts. This reflects strong bullish sentiment as traders seek upside leverage through options,” Dawson explained.
Risks and Bearish Scenarios
However, Dawson cautioned that Ether’s price could fall below $2,000 in a bearish scenario, especially if the anticipated spot Ether ETF fails to attract institutional interest or loses market share to competitors like Solana.
“Ether’s dominance is being challenged by other layer-1 blockchains, which may offer higher risk-reward opportunities,” he added. “In a bull market, investors often gravitate toward assets with the potential for dramatic gains.”
Investor confidence in Ether has grown steadily over 2024. According to IntoTheBlock, the percentage of long-term Ether holders increased from 59% in January to 75% by the end of the year. Conversely, the number of Bitcoin holders declined during the same period.
Conclusion: A Pivotal Year for Ethereum
With the Pectra upgrade, regulatory support, and evolving market trends, 2025 could be a transformative year for Ether. Whether it reaches the predicted $12,000 or faces challenges, Ether remains a focal point for innovation and investment in the cryptocurrency space.
