Why Ethereum Is Poised for New Growth: Analyst Insights and Investor Prospects
Analysts at Steno Research are confident that despite Ethereum’s recent drop in value compared to Bitcoin, it remains one of the most promising cryptocurrencies with significant growth potential.
Since transitioning to the Proof-of-Stake (PoS) algorithm in September 2022, ETH has declined by 48% relative to Bitcoin. While this raises questions for investors, experts see this as a temporary correction amidst broader changes in Ethereum’s ecosystem. The main catalysts for future growth, they argue, are macroeconomic shifts and technological innovations that are gradually pushing Ethereum to new heights.
Ethereum’s move to Proof-of-Stake (PoS) is an event that has already reshaped the market. The transition took place in September 2022 as part of the major Ethereum Merge update, which was a landmark event for the entire crypto community. As a result of this update, the issuance of new Ether tokens was reduced from 4% to less than 1% annually. This shift fundamentally altered the supply dynamics, creating a scarcity that should eventually drive the coin’s value higher. At the same time, the network became more eco-friendly, reducing its energy consumption by 99.95%, which is especially significant given the global trend toward sustainability. But why has the price still not met expectations?
**Is Ethereum Undervalued: A Temporary Setback or Strategic Opportunity?**
Analysts believe that Ethereum’s current underperformance compared to Bitcoin is largely due to macroeconomic factors and global uncertainty. The U.S. Federal Reserve’s interest rate cuts are creating favorable conditions for increased activity in the cryptocurrency market. Like other digital assets, Ethereum is affected by global financial decisions, but its structure allows it to benefit from such changes. Historically, Ethereum has shown the ability to recover quickly after periods of decline, and experts believe that a new surge is on the horizon.
For example, in 2021, Ethereum’s price doubled compared to Bitcoin in just a few months. The main driver of this spike was increased interest in decentralized finance (DeFi), which is largely built on Ethereum’s blockchain. Additionally, the rise of stablecoins and non-fungible tokens (NFTs), which also predominantly rely on the Ethereum network, fueled the growth. A similar situation is emerging today: network activity is increasing, and many developers are returning to Ethereum-based projects, potentially signaling the start of a new rally. However, this time, Ethereum is focusing not only on DeFi and NFTs but also on enhancing its infrastructure.
**Pectra Update: What to Expect in 2025?**
A major factor influencing Ethereum’s future is the upcoming Pectra update, which is set to be the largest hard fork in the network’s history. Pectra will be rolled out in two phases, with the first phase, known as The Prague/Electra, expected in early 2025. This phase will include eight Ethereum Improvement Proposals (EIPs), with EIP-7702 being one of the most significant. This proposal is designed to improve user interaction with Ethereum wallets, simplifying daily operations and increasing the network’s accessibility and demand for tokens.
The second phase of the Pectra update is still in the planning stages, but it is expected to bring substantial changes to the Ethereum Virtual Machine (EVM)—the core technological framework of the network. One potential feature is the implementation of PeerDAS, which will improve selective data availability and unlock new possibilities for Layer 2 blockchains. This means that Ethereum will be able to scale more effectively, handle more transactions, and maintain the security and decentralization of the network.
**Ethereum vs. Bitcoin: Will ETH Outperform BTC Again?**
Despite Bitcoin’s recent dominance, many experts believe that Ethereum could once again surpass its main competitor. During the last bull market, ETH doubled its value compared to BTC, and several factors suggest that this scenario could repeat. First, in the context of falling interest rates and global macroeconomic instability, investors are increasingly seeking alternative assets to protect their capital, and Ethereum, with its unique ecosystem, is becoming one such asset. Second, while Bitcoin primarily serves as a store of value, Ethereum continues to develop as a technological platform.
Bitcoin-focused ETFs have recently outperformed ETH ETFs, but this trend may soon reverse. Ethereum has repeatedly demonstrated its ability to recover and grow rapidly, and the upcoming Pectra update only strengthens these prospects. Current data shows that network activity on Ethereum is increasing, which bodes well for its long-term value. At the same time, the limited supply of new tokens continues to create scarcity, further supporting the future growth of ETH.
**Conclusion: Is Ethereum Ready for a New Surge?**
Given all these factors, analysts at Steno Research are confident that Ethereum is on the verge of a significant rise. Current macroeconomic conditions, network development, and the upcoming Pectra update create favorable conditions for ETH’s value to increase in the coming months and years. For investors seeking long-term growth potential, Ethereum is a cryptocurrency that should not be overlooked.
**Disclaimer:**
This article is for informational purposes only and does not constitute financial advice. All cryptocurrency investments carry risks, and their values can fluctuate significantly. Before making any investment decisions, it is strongly recommended to consult a financial expert and conduct your own research. The author and website are not responsible for any financial losses resulting from the use of the information in this article. Information may change over time, and users are encouraged to stay informed of updates and verify the latest data before investing.