Ether spent most of 2024 trailing behind its cryptocurrency peers but has now firmly joined the rally sparked by bitcoin’s record-breaking climb, crossing the $4,000 mark in December but well below its all-time high of $4,900.
In 2024, ether gained around 53% compared to bitcoin’s 113% surge; however, ether’s recent performance shows promise. Since the U.S. election result, ether has increased 39%, outperforming bitcoin’s 35% gain and signaling a potential resurgence driven by market optimism over president-elect Donald Trump’s anticipated pro-crypto policies.
Other 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 were the go-to product for risk management as spot ether ETFs began trading mid-year and volatility returned to the market toward the year-end. In 2024, nearly 12 million contracts representing a total value of $256 billion traded between ether and micro ether futures. Thirty-nine percent of notional volume traded was transacted in Q4 2024 as the crypto markets reacted to the U.S. election results, signaling buoyant sentiment.
Ether-Bitcoin Ratio
The ETH-BTC ratio, which measures ether’s performance relative to bitcoin, reached its lowest level since launch on Nov 20 of 0.032857, which may be its bottom as we see improved regulatory outlook and an increase in institutional adoption.
What’s Behind Ether’s Rebound
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Ether ETFs Outperform Bitcoin ETFs
U.S. spot ETH ETFs have received a cumulative $577 million in net inflows since their July 2024 launch, marking a shift in investor sentiment. -
Alt Season
Traders may see the ETH/BTC ratio’s lower level as an opportunity, signifying potential gradual rotation from BTC to ETH and other altcoins. -
Staking Yields
28% of ether’s supply is locked in staking contracts with an annualized reward rate averaging 3%. -
DeFi, Smart Contracts, DAPPS and NFTs
Ethereum remains the dominant blockchain for building decentralized finance applications, smart contracts, and NFTs. -
Ether Upgrades
The Dencun and upcoming Pectra upgrades aim to improve Ethereum protocol efficiency and user experience.
Conclusion
The growing interest of institutions in ether ETFs could signify a diversification of institutional portfolios, potentially leading to more demand for ether as a critical role in DeFi and NFT innovations continues into 2025.
