Introduction
Markus Thielen, the head of research at 10x Research, has expressed his views on whether Ether (ETH) could be a viable investment during a potential 2025 Bitcoin bull run. According to Thielen, while Bitcoin is poised for significant growth, Ethereum may not deliver the same returns over the next five years. This article delves into Thielen’s analysis, examining his perspective on Ethereum’s medium-term prospects and the factors that could influence its trajectory.
Analyst Opinions on Ethereum
Observations on Bitcoin’s Growth
Bitcoin has demonstrated impressive performance since January 2024, with a notable increase in its value. By mid-2025, Bitcoin is projected to rise by approximately 121%, surpassing $69k per coin. This trajectory suggests strong market adoption and continued growth.
In contrast, Ethereum’s stagnation has been a significant concern for investors. While the second-largest cryptocurrency has shown resilience, its price has increased by around 46.3% since January 2024, according to TradingView data. Despite this progress, Bitcoin’s dominance in terms of market capitalization (approximately 75%) and trading volume remains a key factor shaping investor sentiment.
Thielen’s Perspective on Medium-Term
Thielen acknowledges Ethereum’s potential but cautions against overoptimism about its future performance. He argues that the second-largest cryptocurrency is not well-positioned to outperform Bitcoin in the next five years, particularly given rising operational costs and staking trends.
Risks of High Operational Costs
Thielen highlights the challenges associated with staking, a critical activity for many DeFi protocols. As adoption increases, validators will face higher risks of exit, potentially leading to a significant reduction in validator numbers within months. This trend could lead to reduced network security and scalability issues, posing a substantial risk over the medium term.
Concerns About Validator Growth
Thielen notes that while the number of active validators has increased from 14 million at the start of 2024 to 37 million in September, this growth is not sustainable. The rate of new validator creation may plateau or decline in the coming months and years due to operational challenges. This potential stagnation raises questions about long-term viability.
Reliance on External Factors
Thielen emphasizes that Ethereum’s value will be heavily influenced by external factors such as regulations, macroeconomic conditions, and global adoption rates. Without a robust infrastructure to support sustained growth, the cryptocurrency may struggle to maintain its dominance in 2025.
Key Metrics for 2025
Validator Numbers and Growth Trends
Thielen observes that the number of validators has increased steadily but notes a concerning negative growth rate. This trend could indicate operational inefficiencies or increasing validator exit rates, raising questions about the future viability of this critical component of the Ethereum network.
Market Sentiment and Centralized Stablecoins
Bitcoin’s resilience is partly attributed to its association with traditional banking systems, which have been undermined by centralized stablecoins. These financial instruments offer lower fees and greater convenience for everyday transactions but pose a significant risk to Bitcoin’s role as a store of value and a hedge against inflation.
Market Sentiment and Catalysts
Past and Future Upshocks
Thielen reflects on the past, where key catalysts such as the Duncan and Pectra upgrades did not materialize as expected. He speculates that the absence of these events in 2025 could lead to a retracement or even a decline for Ethereum’s price relative to Bitcoin.
Long-Term Viability Concerns
Thielen warns against overreliance on optimistic scenarios, emphasizing the importance of considering worst-case outcomes when evaluating potential investments. He suggests that the risks associated with high operational costs and validator dynamics could lead to significant corrections in 2025.
Pseudonymous Traders’ Views
Diversification and Sentiment
A pseudonymous trader acknowledges the allure of Bitcoin’s relative stability but highlights concerns about its liquidity on the New York Stock Exchange (NYSE). This trader argues that centralized stablecoins could limit Bitcoin’s ability to function as a reliable store of value, potentially making it less attractive for long-term holding.
Market Sentiment and Price Dynamics
Another pseudonymous trader notes that market sentiment appears divided. While some investors remain optimistic about Bitcoin’s future, others express caution due to concerns about its liquidity and stability.
Ethereum’s Relative Performance
Comparison with Bitcoin
Thielen points out that as of the time of this analysis, the ETH/BTC ratio stands at 0.03571. This metric reflects the relative strength of Ethereum compared to Bitcoin and suggests potential opportunities for investors seeking exposure in both assets.
Market Sentiment and Relative Performance
Ethereum’s relative performance could be influenced by several factors, including its association with DeFi protocols and staking activities. While these developments offer significant upside potential, they also introduce substantial risks that could impact its trajectory in 2025.
Bitcoin Payments and Centralized Stablecoins
Impact on Payment Systems
The rise of centralized stablecoins has raised concerns about their ability to displace traditional banking systems. These financial instruments offer greater liquidity and convenience but pose a serious threat to Bitcoin’s role as a store of value, potentially undermining its long-term viability.
Market Sentiment and Stability
Bitcoin’s resilience is partly attributed to its association with traditional banking systems, which have been increasingly challenged by centralized stablecoins. This dynamic could lead to increased volatility in 2025 as market participants weigh their options.
Conclusion
Thielen’s analysis underscores the importance of careful consideration when evaluating potential investments in cryptocurrencies such as Ethereum and Bitcoin. While both assets offer significant upside potential, they are also characterized by substantial risks that could impact their performance in 2025. Investors should remain vigilant to emerging trends and factors that could lead to significant corrections or retracements in asset prices.
Final Thoughts
Thielen’s analysis highlights the need for prudent investment decisions, particularly when it comes to cryptocurrencies like Ethereum and Bitcoin. While these assets offer compelling opportunities for growth, they are also deeply influenced by operational, regulatory, and market factors that could lead to significant risks in 2025.
This article is a condensed version of Thielen’s analysis, offering insights into the potential challenges and opportunities associated with investing in Ethereum and Bitcoin. Readers are encouraged to conduct their own independent research before making any investment decisions.