Ethereum (ETH) Is Poised to Outpace Bitcoin (BTC) in 2025, According to Analysts at Compass Point Research

Analysts at Compass Point Research believe that Ethereum (CRYPTO: ETH) will have a strong performance in 2025, outpacing Bitcoin (CRYPTO: BTC).

In their latest Blockchain & Cryptocurrency newsletter, they highlighted key factors that could drive Ethereum's growth in the coming year.

Here's a summary of their insights:

Bitcoin, Ethereum Performance Post-Trump Election: Since the recent Trump/Republican election, both Bitcoin and Ethereum have seen substantial gains. BTC is up around 44% to $100,000, while ETH has gained 38% to $3,600.

Recent 13% Year-End Drawdown In BTC: Despite these gains, Compass Point notes the recent 13% year-end drawdown in BTC, leading to a temporary dip in miner stocks.

However, they expect a "strong upward recovery of hash prices over the next six months" as Bitcoin prices outpace network hashrate growth.

Ethereum Poised For A Bounce-Back Year: The report also emphasizes Ethereum's potential to bounce back in 2025.

“We continue to believe Ethereum (ETH) is set to have a bounce-back year in 2025, with opportunities to go long ETH/BTC ratio that currently trades at $0.037 and is down nearly 70% to BTC since the merge to PoS in Sept 2022,” said the firm.

Compass Point analysts believe that the bounce-back year will be driven by eased regulations and increased clarity around smart contracts and decentralized computing platforms.

They foresee significant growth in Ethereum’s ecosystem, including decentralized finance (DeFi), Layer-2 networks, stablecoins, and staking.

Companies like Coinbase (NASDAQ:COIN) and Galaxy Digital (TSX:GLXY) are expected to benefit from the monetization of Ethereum's growth.

“We think ETH will be one of the top beneficiaries of eased regulations and clarity that will lead to integration of smart-contract decentralized compute platform and ecosystem such as DeFi, Layer-2 networks, Stablecoin, Staking, etc, which we view COIN (Buy, $295 PT) and GLXY (Buy, C$33) as beneficiaries in monetizing growth of Ethereum would make it more valuable and the dominance of BTC would go down,” concluded Compass Point.