Is Ethereum set to rival Bitcoin and Solana in Comeback 2025?

Ethereum has been on a rollercoaster ride in 2024, facing roadblocks and FUD that have hindered its price performance. But there are glimmers of hope on the horizon for the popular cryptocurrency as we head into the new year.

Bitcoin has been making headlines with new all-time highs, inching closer to the coveted $100,000 milestone. This has sparked conversations about Ethereum’s lagging performance compared to the overall market. As of now, ETH dominance sits at 12.6%, the lowest it has been since April 2021.

The talk of the town has been Bitcoin, with institutional money flooding into Bitcoin ETFs, making it the center of attention in the traditional finance world. But Ethereum’s dominance has waned, falling over 50% against Bitcoin since 2021 and dropping below previous highs.

Despite the buzz around Bitcoin, XRP has stolen the spotlight with an astounding 428% surge over the past month, further pushing down Bitcoin and Ether dominance. This trend seemed to be reversing when pro-crypto figure Donald Trump won the 2024 US presidential election, but any gains were short-lived.

Ethereum, facing stiff competition from smart contract platforms like Solana and Sui, is now looking towards a brighter future with an improved regulatory outlook and potential institutional adoption. The ETH/BTC trading pair is showing signs of stability, hinting that it may have reached or is near its bottom.

Many pundits are quick to write off Ethereum, but sentiments change quickly in the world of crypto. The road has been bumpy, but in the past, when things looked bleak for Ether, it has rebounded significantly, leaving room for optimism.

Looking back, Ether hit its peak in June 2017, becoming 83% of Bitcoin’s market cap. The narrative shifted in September 2022, with the Merge to proof-of-stake and the “ultrasound money” meme gaining traction. Despite hopeful expectations, Ether has continued to trend downwards.

As Bitcoin goes through its four-year halving cycles, money often rotates into altcoins like Ethereum. Ethereum believers argue that the recent price drop in Ether compared to Bitcoin is part of this cycle and an opportunity for investors. However, Ether has underperformed against Solana, signaling potential concerns for the Ethereum community.

Ethereum’s decline in the use cases that elevated its status in the last cycle indicates a shift in the market dynamics. Thorn and McArdle note that areas like gaming, NFTs, decentralized social, and DeFi have seen subdued interest, while Bitcoin gains momentum.

While Ethereum faces challenges from competitors like Bitcoin DeFi, technical advancements in the Bitcoin ecosystem pose potential threats to Ethereum’s dominance. Soft fork proposals could enhance security and efficiency on Bitcoin’s layer-2 networks, potentially altering the DeFi landscape.

In this shifting crypto landscape, Ethereum is at a crossroads, with its fate hanging in the balance. As we move into 2025, all eyes will be on how Ethereum navigates the challenges and opportunities that lie ahead in its quest to regain its former glory.