Analysts from a prominent research and brokerage firm have identified Ethereum (ETH) as presenting an enticing risk-reward ratio, despite its relatively lackluster performance in 2024 compared to other leading cryptocurrencies such as Bitcoin (BTC), Solana (SOL), and XRP . Currently, Ethereum holds the second-largest market capitalization at over $430 billion, and its robust fundamentals suggest the potential for an upward price rally.
Examining Ethereum ’s performance this year reveals that, while Bitcoin and Solana have each surged by over 120%, ETH has only managed a 57% increase. Factors contributing to its stagnation include its struggle to establish itself as a reliable store of value, a role that Bitcoin has successfully occupied. Furthermore, Ethereum faces growing competition from faster Layer 1 blockchains like Solana , Sui, and Aptos.
The reliance on Layer 2 solutions, such as Optimism, Arbitrum, and Base, has also diverted users from Ethereum ’s main chain. This trend can negatively impact user retention and limit the growth of transaction fees, which are crucial for price momentum.
Despite these challenges, there is optimism regarding Ethereum ’s future. The recent surge in the total cryptocurrency market cap — over 45% since the election of a crypto-friendly presidential candidate — has buoyed Ethereum , which has gained 46% in this time span, surpassing Bitcoin and Solana ’s gains.
Moreover, the anticipated approval of staking yields in Ethereum -related exchange-traded funds (ETFs) could further enhance its appeal. Analysts predict that under the guidance of a pro-crypto regulatory environment, ETH’s staking yield may increase significantly. This shift could be particularly attractive as yield rates in traditional markets decline.
Additionally, Ethereum ’s transition to a proof-of-stake consensus and its burn mechanism have stabilized its total supply, with a significant portion of ETH currently locked in staking contracts. The firm’s analysis suggests that the high percentage of ETH that remains untouched could create favorable demand-supply dynamics, potentially signaling a market turnaround for Ethereum . At present, ETH is trading at approximately $3,652, reflecting a minor dip of 1.3% in the last 24 hours, according to CoinMarketCap data.
