Ethereum bears worry about a rising tide of competing cryptocurrencies, often able to execute those smart contracts faster and cheaper than Ethereum. There's also a plethora of layer 2 tokens around the Ethereum core, designed to speed up the main network's performance. But on the downside, pessimists see these helpful tokens sucking monetary value out of Ethereum itself. And the unimpressive market performance inspires another round of negative commentary and Ethereum pessimism. Technical analysis can be a self-fulfilling prophecy sometimes.
Long story short, the Ethereum doubters have their reasons.
But Ethereum still has some big-name champions. Famed growth investor Cathie Wood is a well-known Bitcoin bull, but she also sees good things ahead for Ethereum investors. Her market research team recently said that Ethereum's market cap could reach $20 trillion in 2032 and $1 trillion by the end of 2025.
That's an extremely bullish attitude. Ethereum's market cap is $297 billion today, so it would have to more than triple in price to reach that short-term goal.
As a longtime Ethereum owner myself, I'd gladly settle for a much lower valuation bar in 2025. I'm actually not even very interested in big gains this year. Ethereum is a long-term holding in my view, and patient investors with very long holding periods should do well with this innovative digital asset.
Some expected exchange-traded funds (ETF) to make a big difference, allowing the inflow of dollar-based wealth into the Ethereum asset. But the Ethereum-based ETF approvals arrived in July 2024, Ethereum prices dipped more than 30% over the next two weeks, and the largest fund, iShares Ethereum Trust (NASDAQ: ETHA), only has $3.6 billion of assets under management seven months later. That's a drop in the bucket next to its sister fund, the iShares Bitcoin Trust (NASDAQ: IBIT), with $55.3 billion of assets. The difference in fund sizes is much larger than the gap between the underlying cryptocurrencies.
Again, I'm fine with that. Slow or negative returns in 2025 give me more time to buy Ethereum coins at a reasonable price, after all.
You see, I agree with Cathie Wood's long-term assessment in principle. Again, Ethereum doesn't have to become a $20 trillion asset, but I do expect it to gain value over time.