Will 2025 be the year Ethereum (ETH) finally reaches a higher price range?

Ethereum (ETH) ended 2024 with prices under $3,400, failing even the mid-range predictions of trading above $6,000. The asset still gained around 43% in one of the best years for crypto growth but failed the expectations for breaking to new all-time highs.  

Ethereum (ETH) is indispensable to the crypto space, providing a network with enough adoption among developers and Web3 projects. Additionally, ETH is widely traded and inspires confidence for both centralized traders and DeFi users. On the first day of the new year, ETH traded at $3,338.80, recently losing its $3,400 support level. While ETH remains in a predictable range, the lack of a breakout remains worrying.

Research by 10X suggests ETH may be stagnating, preparing for another year of trading in a range. The price action for the past three years was often called consolidation, but it may also signal Ethereum’s failure to become the future of crypto.

The past year once again raised questions on why Ethereum seems to outperform on most metrics, but the ETH market price remains stagnant relative to Bitcoin (BTC) and lags behind hotter trends like memes and AI agents. 

Solana (SOL) expanded by 82% net in the past 12 months after a series of corrections. While SOL is also growing slower compared to other assets, it still gained some ground against Ethereum. The chain’s biggest achievement was growing its DEX volumes after the meme token and AI agent boom. 

Ethereum is mostly used for passive income

While Ethereum is still selected for Web3 activities, it has lagged behind some of the latest trends. The reason is that despite the Dencun upgrade and lowered fees, it may still be prohibitively expensive to perform fast swaps. For retail users, Ethereum fees may cut into earnings while also adding the danger of sandwich attacks. 

For those reasons, Ethereum has become the playground of whales, who use the network for passive income. After mining is removed, up to 28% of the supply of ETH is staked. The idle ETH is off the market and has given rise to protocols like LidoDAO.

Multiple whales use ETH as a tool to earn 2.8% in annualized passive income while holding for the long term. Some of the ETH staked is at a cost basis under $2,000, and many early ETH whales have no incentive to sell. More than 60M ETH were created after the ICO, while miners produced 49.7M ETH. The recent staking validators have produced a net 2.6M ETH, with an annual inflation of 0.57%.

ETH from the ICO or older holdings may also be used to support new projects and crypto startups. The token is also locked in the form of WETH, spreading to DeFi lending protocols and even to Solana. 

Despite this, Ethereum seems to have lost the battle for mainstream adoption, as casual Web3 users move to Base or Solana for cheaper transactions. 

Ethereum still has to solve the issue of L2 data 

One of the reasons for Ethereum’s success is that the network is still indispensable to L2 chains. However, the balance between L1 and L2 was still imperfect. After the Dencun upgrade in March 2024, L2 found it extremely cheap to secure their transactions onto Ethereum blocks. 

It took months for L2 chains to see an increase in blob fees. Currently, L2 chains aim to pay optimized fees and change their posting schedule if blob prices start rising. 

This also creates problems for Ethereum users. Recently, data showed that Arbitrum may be using the same block space as regular users. When blob fees rise too much, Arbitrum switches to calldata, competing for block space with all other ETH users. Instead of scaling Ethereum, Arbitrum’s L2 is actually making the chain more expensive to use. 

In 2025, Ethereum experts demand new scaling attempts, where the main L1 network itself becomes cheaper and faster to use. While L2 works as a scaling solution, it also hurts Ethereum’s performance and drives down its direct adoption. At the same time, most L2, with the exception of Base, remain too obscure and difficult for mass adoption.

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