Ethereum could reach $12,000 this year

A key event for the Ethereum network will be the Pectra update, scheduled for Q1 2025, which is expected to significantly enhance scalability, allowing for more transactions at lower costs while improving efficiency and compatibility with Layer 2 solutions. Sean Dawson, head of research at the DeFi protocol Derive, claims that Pectra's success will provide Ether with a strong growth catalyst. The integration of real-world assets and the expansion of sectors like DePIN and AI agents will make the network even more in demand. Dawson also noted that favorable regulatory conditions under the Trump administration will lay the groundwork for further growth.

Growth point or risk?

It is expected that Ether-based exchange-traded funds (ETFs) will attract significant institutional funds; however, this process is not without risks. If Ether ETFs fall short of expectations, they could be outpaced by a more successful Solana ETF, which would put pressure on ETH prices. During bullish markets, investors might shift to Layer 1 blockchains with higher growth prospects.

Nevertheless, the options market reflects strong optimism. According to Derive.xyz, open interest in call options exceeds put options by 250%, signaling high expectations among traders.

ETH growth factors

In 2024, the share of long-term Ether holders who have held the asset for over a year increased from 59% to 75%, according to IntoTheBlock, highlighting growing confidence in the Ethereum network. Simultaneously, Layer 2 networks like Base have become platforms for AI agents, further expanding Ethereum’s capabilities and strengthening its market position. Pro-crypto policies under President Donald Trump may also create a more favorable environment for investors and developers.

Challenges on the way to $12,000

Despite optimism, Dawson warns of a possible "bearish scenario," in which Ether's price could drop below $2,000. Key risks include insufficient institutional interest in Ether ETFs, competition from blockchains offering higher yields, and overall crypto market volatility driven by political and economic changes.