Summary:
Ether gained around 53% in 2024, trailing Bitcoin's 113% surge.
Ether has increased 39% since the U.S. election, outperforming Bitcoin's 35% gain.
Key factors include robust staking dynamics, steady transaction fees, and growing institutional interest.
CME ether futures traded nearly 12 million contracts valued at $256 billion in 2024.
The ETH-BTC ratio reached a low of 0.032857, signaling potential recovery.
Ether's Performance in 2024
Ether spent most of 2024 trailing behind its cryptocurrency peers but has now firmly joined the rally sparked by Bitcoinâs record-breaking climb, crossing the $4,000 mark in December, although still below its all-time high of $4,900.
In 2024, ether gained around 53% compared to bitcoinâs 113% surge; however, ether's recent performance shows promise. Since the U.S. election result, ether has increased 39%, outperforming bitcoinâs 35% gain, signaling a potential resurgence driven by market optimism over president-elect Donald Trumpâs anticipated pro-crypto policies.
Driving Factors Behind Ether's Optimism
Key factors driving this optimism include robust staking dynamics, steady transaction fees, and growing institutional interest, particularly through ETFs.
Ether Futures
While the year started with muted volume, CME ether futures became the go-to product for risk management as spot ether ETFs began trading mid-year. In 2024, nearly 12 million contracts representing a total value of $256 billion traded between ether and micro ether futures. 39% of notional volume traded was transacted in Q4 2024, indicating a buoyant sentiment in response to the U.S. election results.
Ether-Bitcoin Ratio
The ETH-BTC ratio, which measures etherâs performance relative to bitcoin, reached its lowest level since launch at 0.032857. This may signal a bottom as improved regulatory outlook and increased institutional adoption are anticipated.
Ether's Rebound Factors
- Ether ETFs Outperform Bitcoin ETFs: U.S. spot ETH ETFs have received a cumulative $577 million in net inflows, with ether ETFs surpassing daily inflows of bitcoin ETFs.
- Alt Season: Traders may view the lower ETH/BTC ratio as an opportunity, leading to a potential rotation from BTC to ETH.
- Staking Yields: Ether investors can earn rewards by staking their coins, with 28% of etherâs supply currently locked in staking contracts.
- DeFi and NFTs: Ethereum remains dominant for decentralized finance (DeFi) applications, with the total value locked in Ethereum-based DeFi projects reaching $69.4 billion.
- Ether Upgrades: The Dencun upgrade and anticipated Pectra upgrade aim to improve protocol efficiency and scalability.
Market Outlook
All eyes are on what the Trump administration will bring and its implications for the entire crypto market, with rising institutional interest in ether ETFs indicating a diversification of portfolios previously focused on bitcoin. The potential for staking rewards and ether's central role in DeFi and NFT innovations in 2025 may further escalate demand for ether.
Comments