FameEX Hot Topics | Ethereum Price Could Reach $5,000 by 2025

Ethereum's price has seen a notable surge of 43.6% between May 7 and May 14, bringing its value to $2,600. Despite this growth, the cryptocurrency still remains far from its 2021 all-time high of $4,868. Some analysts believe that the current bullish momentum could be the start of a more aggressive uptrend, with a near-term rally potentially pushing Ethereum to $5,000. However, the path to a new all-time high in 2025 remains uncertain, particularly given the intensifying competition from other blockchain platforms.

One of the key factors driving Ethereum’s potential for a new peak is its appeal as an institutional investment. X user AdrianoFeria pointed out that ETH is considered one of the best candidates for institutional diversification. Professional fund managers are drawn to Ethereum due to its regulatory clarity and accessibility, particularly through various spot exchange-traded funds (ETFs). Despite these advantages, recent data suggests that institutional interest in Ethereum-based products remains lukewarm. Between May 12 and May 13, US-listed Ether ETFs saw net outflows of $4 million, and the total size of the Ether ETF market is still 92% smaller than Bitcoin's $121.5 billion.

The lack of institutional interest has led some traders to question whether Ether can gain the traction needed to push its price to new heights. A significant obstacle lies in Ethereum's monetary policy, particularly the built-in burn mechanism introduced in 2021. This was initially designed to reduce supply growth in line with network demand, but the shift toward scalability improvements, particularly through rollups, has counterbalanced its deflationary impact. As a result, Ethereum now requires a substantial increase in on-chain activity to regain its deflationary nature.

On the positive side, the recent Pectra upgrade has enhanced Ethereum’s scalability by improving data transmission efficiency. This upgrade has already shown positive results, with layer-2 network activity rising by 23% from the previous month. The Base network has led this growth with 244.2 million transactions over 30 days, according to L2beat. If this trend continues, it could generate sustained demand for ETH, helping differentiate Ethereum from competing platforms and adding to its bullish prospects.

Looking ahead, artificial intelligence (AI) adoption could be a key catalyst for driving Ethereum's price towards new highs. Ethereum advocate Eric Conner pointed out that AI platforms like ChatGPT favor Ethereum’s layer-2 infrastructure for managing funds via multisignature contracts, which could increase autonomous transaction volumes. While it's uncertain whether this trend will fully materialize, the potential for smart contract activity to grow significantly could make a new all-time high for ETH in 2025 achievable, especially if regulatory changes further drive institutional interest.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.