Here's What History Says to Expect For Ethereum in Q4

Key Points

• Ethereum usually gets pricier during the fourth quarter.

• That dynamic could be shifted a bit this time around, and also moving forward.

• It still has a good chance of performing well for the next few months and beyond.

• 10 stocks we like better than Ethereum ›

When enough investors see the same price action at the same time of year, their habits can echo through prices. Ethereum (CRYPTO: ETH) happens to have one of those habitual echoes late in the calendar year.

Let's take a look at what investors should be expecting from this coin in the fourth quarter.

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What the record actually says

Traditionally, Q4 is the best-performing quarter for Ethereum, with the median return being around 22% and the average near 24%.

That tells us two things. First, late-year momentum has often been kind to holders, and second, the dispersion of results is wide enough that the median trails the average, which implies some very big upside outliers.

With that being said, it's important to be precise about what this means. Seasonality is a tendency shown by an asset's past performance, and it's just one factor among many others affecting prices. There have been Q4 drawdowns, including a couple of extremely sharp ones in the ballpark of 40% in both 2016 and 2018, and there will be more eventually.

Ethereum is also a very different asset in 2025 than in prior years, and thus it is to be expected that it'll perform somewhat differently with regard to its seasonality.

The Securities and Exchange Commission (SEC) approved applications in May 2024 to list spot Ether exchange-traded funds (ETFs), opening the door for mainstream brokerage accounts to allocate without learning new plumbing. Those same ETFs also heralded an increasing degree of the coin's integration with the traditional financial system as asset managers began to accumulate it. Now, with crypto treasury companies being formed with the sole intent of buying and holding Ethereum, there's a new crop of investors affecting the coin's float as well.

Therefore, the investors whose actions were responsible for creating the historical price behaviors in the fourth quarter may not be as relevant this time around. The new players on the scene, primarily asset managers and treasurers, have a lot more capital to throw around, and much longer investing horizons than the average buyer of the era before they arrived.

Why this Q4 could rhyme again

There are other trends indicating that Q4 is likely to be a good one for Ethereum, in keeping with its historical performance during the period.

The biggest structural driver of demand for the coin in the near term, and thus higher prices, is asset tokenization. You can think of tokenization as the process of recording the ownership of real-world assets -- like U.S. Treasuries, vehicles, commodities, or stock shares -- on a blockchain as tokens, so that the underlying assets can settle faster, move 24/7, and be used more flexibly as collateral for other purposes.

Many of the largest tokenized asset programs are already running on Ethereum. That's why it has more than $8.3 billion in tokenized asset value parked on its chain. This is up by an impressive 7.5% over the last 30-day period ending on Sept. 18 alone, and constituting a share of 31% of the total value of tokenized assets which currently exists. With more high-grade assets living on its chain, the case for Ethereum's role in institutional finance strengthens. That can support more demand for the asset over multi-year horizons, as well as right now.

But what should an investor do with that information? Don't try to time the market, for one. Remember, seasonality isn't something to hang your portfolio's value on.

If you wait for a perfect bargain, you may end up watching from the sidelines while history plays out. There may well be a dip to buy this coin sometime in the next four months, but don't count on it. There aren't any major competitive threats to it that will be relevant to the price in that timeframe, and the possibility of macroeconomic weakness causing a sell-off, while real, is not probable enough to bet on right now.

A more practical path is to start buying Ethereum deliberately, ideally via a dollar-cost averaging (DCA) plan, and holding it for years rather than months. If Q4 performs like its median, you will be glad you owned it. If it doesn't, the long-term tokenization story is still very much intact, and you'll just need to wait a bit longer for it to pay off.

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Alex Carchidi has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.