FameEX Hot Topics | Ethereum Price May Surge to $5,000 by 2025

Ethereum has experienced a sharp 43.6% price increase between May 7 and May 14, pushing its value up to $2,600. While this is a significant gain, it still lags behind its all-time high of $4,868 set in 2021. Some analysts believe this recent surge could mark the beginning of a more powerful and sustained uptrend, potentially leading to a short-term rally toward $5,000. However, others remain cautious, citing strong competition from emerging blockchain platforms and uncertainties around Ethereum’s long-term growth trajectory.

A major factor that could support Ethereum’s next rally is its increasing appeal among institutional investors. According to crypto commentator AdrianoFeria on X, Ethereum is seen as a top candidate for institutional diversification due to its relative regulatory clarity and ease of access, especially via spot exchange-traded funds (ETFs). However, this enthusiasm hasn’t translated into strong inflows. Between May 12 and May 13, Ether ETFs in the U.S. saw $4 million in net outflows, suggesting tepid interest. Moreover, the total market size of Ether ETFs remains just a fraction of Bitcoin’s—92% smaller than Bitcoin’s \$121.5 billion—highlighting the need for stronger institutional conviction.

One challenge facing Ethereum’s bullish outlook is its evolving monetary policy. In 2021, Ethereum introduced a burn mechanism aimed at reducing token supply in proportion to network usage, theoretically making ETH deflationary. But that impact has been blunted as attention has shifted toward scalability solutions, such as rollups. These upgrades help process transactions off-chain, easing congestion but also reducing on-chain activity—which is needed for the burn mechanism to have a significant deflationary effect. Without increased usage, Ethereum risks losing one of its core bullish narratives.

Despite these concerns, recent technical upgrades have improved Ethereum’s scalability. The Pectra upgrade, for example, enhances data transmission efficiency across the network. This has coincided with a 23% monthly jump in layer-2 activity, led by the Base network, which processed over 244 million transactions in 30 days, according to L2beat. Sustained growth at this pace could support long-term ETH demand and help Ethereum maintain a competitive edge over rival platforms.

Looking ahead, artificial intelligence may become a game-changer for Ethereum’s ecosystem. Ethereum advocate Eric Conner noted that AI systems like ChatGPT prefer Ethereum’s layer-2 environment for handling smart contracts and payments via multisig wallets. As AI-driven applications grow, Ethereum could see a surge in on-chain activity—potentially making the \$5,000 target and a new all-time high in 2025 more realistic, especially if supportive regulations accelerate institutional adoption.

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