Ether Poised to Surpass Bitcoin in 2025

After a year of lagging behind its peers, ether has joined the cryptocurrency rally, surpassing $4,000 in December, albeit below its all-time high of $4,900. Despite gaining only 53% in 2024 compared to bitcoin's 113%, ether's recent performance is promising, with a 39% increase since the U.S. election results, outpacing bitcoin's 35% gain. This surge is driven by optimism over the new administration's pro-crypto policies, robust staking dynamics, steady transaction fees, and growing institutional interest, particularly through ETFs. The year saw significant trading volume in ether futures, with nearly 12 million contracts traded, representing $256 billion. Large open interest holders reached new records in December, indicating increased client interest in regulated solutions for managing ether risk. The ETH-BTC ratio, which measures ether's performance relative to bitcoin, reached its lowest level since launch, potentially signaling a rebound. Factors contributing to ether's resurgence include the outperformance of ether ETFs, the potential for an alt season, staking yields, and Ethereum's dominant role in DeFi, smart contracts, and NFTs. With 28% of ether's supply locked in staking contracts and an annualized reward rate of 3%, investors can generate extra returns. The total value locked in Ethereum-based DeFi projects has grown to $69.4 billion, indicating rising confidence in Ethereum. Upcoming upgrades, such as the Pectra upgrade in Q1 2025, aim to improve protocol efficiency and enhance the user experience. As institutions diversify their portfolios and the Trump administration's policies take shape, ether may see increased demand, potentially outperforming bitcoin in 2025.