Ethereum (ETH) is expected to perform remarkably in 2025, soaring from over $1800 at the beginning of the year to over $4200 in August, an increase of more than 130%. What are the driving factors behind this astonishing growth? Let's analyze it in depth.

First of all, from a data perspective, ETH's performance is indeed impressive. In terms of price, the starting price in January was $1823, and by August 11, it had surpassed $4210, even reaching a yearly high of $4358 on August 8. At the same time, trading volume has also seen explosive growth, with an average daily trading amount reaching $4.5-4.9 billion.

Network upgrades are an important factor driving the rise in ETH prices. The Fusaka hard fork is expected to go live in November, significantly enhancing the network's scalability and reducing Gas fees. These improvements have already had a notable effect, with the total value locked in DeFi rising from $50 billion to $120 billion. In addition, Layer-2 networks (such as Arbitrum) now handle 70% of transactions, making the Ethereum ecosystem more active.

Institutional investor enthusiasm is also driving up the price of ETH. The inflow of funds into ETH ETFs has exceeded $10 billion, and large investors (commonly known as "whales") are actively increasing their holdings of ETH. This has led to a market supply reduction of about 2%, equivalent to 500,000 ETH being burned. At the same time, NFT trading volume has doubled year-on-year, and the DeFi market is gradually recovering.

Compared to Bitcoin, Ethereum is more like the "king of applications" in the world of cryptocurrencies, with its advantages particularly evident in the fields of DeFi and NFTs. These technological advancements and the development of the ecosystem are not unfounded, but rather tangible progress.

From an internal perspective, Ethereum's technological upgrades make the network faster and cheaper, attracting more developers. In addition, the supply mechanism of ETH is similar to Bitcoin's "halving" effect, making ETH increasingly scarce, which naturally drives up the price.

In terms of external factors, after the U.S. approved the ETH ETF, a large amount of capital flowed into the market. The rise in Bitcoin prices has also driven up other cryptocurrencies. In addition, expectations of potential interest rate cuts by the Federal Reserve have increased the attractiveness of cryptocurrencies. Market sentiment has shifted from "fear" to "greed," and many investors have even begun to discuss whether ETH could surpass BTC in market capitalization.

Looking ahead, in the short term (before the end of the year), the price of ETH may fluctuate between $4000 and $6000, and could even break $7000 after the launch of Fusaka. However, investors also need to be wary of potential regulatory risks. In the medium term (2026-2030), if the bull market continues, the average price of ETH may be between $5000 and $10000. Of course, we must also be aware of potential risks, such as challenges from competitors like Solana, and the possibility of a macroeconomic recession.

Nevertheless, from an overall perspective, the outlook for ETH remains optimistic. As the "king of infrastructure" in the cryptocurrency world, Ethereum still has significant room for development in the future. However, investors should conduct thorough research and risk assessment before making any investment decisions.