Ethereum (ETH 3.15%), the world’s second-largest cryptocurrency, has had a volatile year. It struggled earlier in the year, even as Bitcoin, the world’s largest cryptocurrency, took off. Then it rallied, rising from less than $1,500 to more than $4,800. Recently, it has struggled as the crypto sector lost some of its enthusiasm after the Federal Reserve’s interest rate cut at its September meeting.

The coin now trades at about $4,200. But many crypto investors are still quite bullish on Ethereum’s future. One top crypto analyst thinks Ethereum can rise by 525% during the next three years or so.

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Momentum remains strong among institutional investors

Bitcoin has benefited from the Bitcoin treasury movement, in which companies tap the capital markets to raise funds that they then use to buy Bitcoin. This trend has shifted to Ethereum, which is now being gobbled up at a faster pace than Bitcoin, according to Geoff Kendrick, head of digital assets at Standard Chartered.

In mid-August, Kendrick noted that Ethereum treasury companies and spot Ethereum exchange-traded funds (ETFs) had purchased 3.8% of all circulating Ethereum since early June. That’s double the fastest pace at which Bitcoin treasury companies ever bought Bitcoin.

Kendrick also thinks that Congress passing of the U.S. Genius Act will serve as another big tailwind for Ethereum. The law creates a regulatory framework for stablecoins, which are digital assets pegged to a commodity or currency like the U.S. dollar.

U.S. dollar-backed stablecoins are potentially a huge innovation in the world of payments because they possess the characteristics of cryptocurrencies but without the volatility. Anyone with access to the internet can use stablecoins to transmit money.

While the devil is always in the details, the framework could provide regulatory clarity, which will encourage more mainstream financial institutions, like banks and investment funds, to use stablecoins. Kendrick said in a research note that more than half of all stablecoins are issued on Ethereum, and make up roughly 40% of the network’s fees.

Growth of stablecoins should help expand Ethereum’s network, bolstering the case for Ether coins and driving up demand. Kendrick said that Ethereum developers are planning to boost the main network’s throughput by 10-fold, letting the network process larger and more transactions.

Based on the tailwinds mentioned above and rising demand from institutional investors, Kendrick in August said Ethereum could reach $7,500 by the end of the year and then vault to $25,000 by the end of 2028, implying a roughly 525% gain from current levels.

Can Ethereum hit $25,000?

Kendrick is one of the few Wall Street analysts I know who covers cryptocurrencies like stocks and issues price targets. There are likely others, but they aren’t as prominent as Kendrick. While Kendrick has a breadth of experience and knowledge, I would caution investors from reading too much into these price targets.

Crypto is extremely volatile and harder to value than traditional stocks because cryptocurrencies don’t generate earnings and free cash flow, which is how most stocks are valued. Additionally, crypto tends to rise and fal in cycles.

I do, however, agree with a lot of what Kendrick said in terms of catalysts. More stablecoin usage and institutional interest should help the network grow and, therefore, so should demand for Ether coins. Better throughput on the network and the ability to process more transactions would help Ethereum stave off competition and remain the leading network for decentralized applications.

Although I can’t provide a price target for 2028, Ethereum is one of the few cryptocurrencies that I think investors can buy that will generate good long-term returns.