Analysts at research and brokerage firm Bernstein predict that Ethereum's cryptocurrency ether (ETH) will have a breakout year in 2025.
Gautam Chhugani, who leads the analysis, assures that ETH could establish itself as the next "institutional favorite."
Even though ETH has had a moderate performance over the last year, up 56% and far from its all-time high of $4,800 reached in 2021, Bernstein notes that its usefulness in the decentralized applications (dApps) ecosystem and its role in staking strengthen their position in the market.
The firm highlights that 28% of ether issued is deposited in staking. This practice, which allows users to earn rewards by locking their tokens in smart contracts, reduces the availability of ETH in the market, as defined by Criptopedia, the educational section of CriptoNoticias.
In addition, 3% of ETH is absorbed by ETFs and 7.5% remains locked in smart contracts.
According to Bernstein, this limited supply, combined with its usefulness as a fee payment and collateral asset on layer 1 and layer 2 chains, attracts traditional investors.
These factors, analysts explain, offer intrinsic value that is attractive to institutions looking for digital assets with clear applications.
Bernstein defines this period that begins in 2025 as the "age of infinity", in which cryptocurrencies cease to be controversial to become fully integrated into global financial systems.
According to Chhugani, investors can expect lower volatility in boom and bust patterns as cryptocurrencies are positioned as a structural part of the financial landscape.
It also points out that companies, banks and financial institutions are integrating digital assets into their operations, consolidating their adoption.
Analysts also foresee a favorable regulatory environment for cryptocurrencies in 2025. With the new administration in the United States, led by Donald Trump, Bernstein anticipates progress in stablecoin legislation.
These types of assets, which strengthen the US dollar through the purchase of Treasury bonds and the distribution of digital dollars, could benefit from greater legal clarity and new regulatory licenses, the analysis says.
Additionally, Bernstein hopes that the convergence between cryptocurrencies and Artificial Intelligence (AI) will drive new innovations.
Key developments include decentralized networks focused on computing and inference, authentication services based on “proof of human being,” and wallets with AI capabilities.
ETH, backed by its network and utility, could solidify its position in 2025 as a key asset for financial institutions. With an evolving regulatory environment and its integration with new technologies such as AI, ETH appears well positioned to capture the interest of traditional and emerging markets.
Although, taking bitcoin's place as an "institutional favorite" seems to be something quite difficult to achieve.
Source: Nicholas Plaza / Criptonoticias.
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