Ethereum (ETH) has significantly underperformed Bitcoin (BTC) and the broader crypto market since the start of 2025. After opening the year above $3,300, ETH fell to a low of $1,805.40 by April 4, 2025 — a decline of roughly 45%. In contrast, Bitcoin, which surged from under $69,000 in November 2024 to over $109,000 in January 2025, was down only about 10% over the same period. This divergence has caused frustration among ETH holders, yet some experts remain bullish on Ethereum's long-term prospects, predicting a return to $5,000 by year-end and even surpassing $10,000 in the near future.
Foundational Development Over Hype
Alex Loktev, CRO at P2P.org, attributes Ethereum's recent price weakness to its focus on foundational development rather than hype-driven narratives. He points out that Ethereum's transition to Proof-of-Stake (PoS), implementation of EIP-1559, and expansion of Layer-2 ecosystems — while not immediately boosting price — are crucial for long-term stability and scalability. Meanwhile, Bitcoin ETFs, AI tokens, and memecoins have captured market attention, leaving Ethereum to quietly build infrastructure. Loktev believes that once the groundwork is complete, ETH will surpass previous highs under favorable market conditions.
Pectra Upgrade: Safer Staking, Higher Efficiency
Scheduled for April 30, the Pectra upgrade is expected to reshape Ethereum's staking landscape. Loktev highlights that slashing penalties will be reduced by up to 128x (from 3.28% to 0.19%), making staking dramatically safer and removing a major barrier for institutional participants. The upgrade also introduces auto-compounding: consensus layer rewards, which account for about 75% of total staking returns, will automatically grow validator balances, providing compound interest without manual intervention. Furthermore, the Maximum Effective Balance (MEB) increases from 32 ETH to 2,048 ETH, significantly reducing operational complexity. "Running 64 validators instead of one means 64 times the infrastructure complexity, 64 times the monitoring overhead, and 64 times potential points of failure," Loktev said, stressing that larger validators simplify operations.
Staking Ratio Could Climb to 40-45%
Loktev predicts that the enhanced safety and yield from Pectra will attract more capital, pushing the current staking ratio of around 31% to 40-45% within the next one to two years. More supply locked reduces circulating tokens and creates greater DeFi yield opportunities. While the upgrade alone may not immediately pump ETH's price, it strengthens Ethereum's economic foundation by locking supply and improving fundamentals. Looking ahead to 2030, Loktev sees Ethereum as essential infrastructure for the digital economy — its success hinges on scaling via Layer-2 solutions and maintaining PoS effectiveness, rather than short-term price movements.