Ethereum prepares for a decisive year: the Pectra update and a favorable regulatory environment boost optimism on the price, but Dogecoin plummets by 10%. Let’s see all the details in this article. 

Ethereum, the second cryptocurrency by market capitalization, could reach a record value of $12,000 in the next year, marking an increase of 257% compared to current levels. 

This optimistic scenario is outlined by Dr. Sean Dawson, head of research for the DeFi Derive protocol, who attributes this growth to two key factors. 

That is, the implementation of the update Pectraand a positive regulatory environment during the first year of the presidency of Donald Trump.

Currently traded at around $3,361, Ethereum is attracting great attention in anticipation of the launch of its Pectra update, scheduled for the first quarter of 2025. 

The update aims to improve the scalability and efficiency of the network, which are fundamental for attracting new users and consolidating the role of Ethereum as a reference infrastructure in the blockchain world.

Dawson has indeed explained: 

“If Ethereum manages to achieve wider adoption, especially in emerging sectors such as real-world assets, ETFs, and AI applications, we could see a significant bull in price.”

Furthermore, the growth of layer 2 solutions, such as Base, could further strengthen Ethereum’s position in the market.

Matt Hougan, from Bitwise, emphasized that Ethereum’s layer-2 platforms, such as Base, are already widely used by artificial intelligence applications, a trend that could accelerate in the coming months.

Despite the optimism, Dawson urges caution. In a bear scenario, the price of Ether could drop below $2,000. This is especially true if the ETF on Ether fails to attract institutional interest, favoring instead alternatives like Solana. 

Furthermore, Ethereum faces growing competition from other layer-1 blockchains, which promise potentially higher returns.

A positive factor is represented by the growing number of long-term Ether holders. 

According to IntoTheBlock, the percentage of Ether held for extended periods has risen from 59% in January to 75% by the end of 2024, indicating growing confidence in the network.

The cryptocurrency market has taken a hard hit in the last 24 hours, with Dogecoin (DOGE) leading the losses among the main digital assets. 

Bitcoin (BTC) fell by 5.5%, nearly reaching $96,000, while the CoinDesk 20 (CD20) index, which tracks the most capitalized cryptocurrencies, recorded an overall loss of 7.1%.

Other important cryptocurrencies, such as Solana (SOL), Cardano (ADA), Binance Coin (BNB), and Ethereum (ETH), have also experienced a decline of at least 7%.

Questo crollo è stato attribuito ai dati economici statunitensi più forti del previsto, che hanno spinto i rendimenti dei Treasury a 10 anni ai livelli massimi da maggio.

The report from the Institute for Supply Management (ISM) showed an acceleration in the prices paid by service providers, while job offers increased beyond expectations. 

These developments have cooled hopes for further interest rate cuts by the Federal Reserve.

The cryptocurrency market reacted with a series of significant liquidations, totaling $560 million. 

Despite the current landscape, some analysts maintain an optimistic view in the long term. Vince Yang, CEO and co-founder of zkLink, has indeed stated: 

“These declines, as dramatic as they may be, are not unusual for the cryptocurrency market. Historically, these downturns have often preceded significant bull movements.” 

Yang also emphasizes that a more crypto-friendly U.S. administration could favor a recovery in 2025.

However, QCP Capital, a company based in Singapore, urges caution, highlighting imminent structural risks, as stated in a recent communication: 

“The restoration of the U.S. Treasury debt ceiling in mid-January could trigger further volatility in the markets.”

In conclusion, while the crypto market is facing a period of high volatility and uncertainty, the long-term prospects remain encouraging for many experts. 

However, investors will need to navigate cautiously through the structural risks and macroeconomic changes that influence the global markets.