Ether , the digital silver to bitcoin’s gold, has outperformed the rest of crypto since the U.S. election and brought ether ETFs to life at last. It may just be getting started. Ether and the exchange-traded funds that track it are up about 49% since Nov. 5, compared to bitcoin at 38% in the same period. After the expectedly lethargic launch of the ETFs in July, they began registering big inflows after the election following a trend of mostly outflows. Investors had abandoned ether for much of 2024, questioning its investment opportunity . Bitcoin’s value proposition became easier to grasp than ether’s alongside the success of bitcoin ETFs. Ethereum competitor Solana surged in popularity and ether’s supply rose despite a previous tech upgrade that should have had reduced supply. Plus, the absence of regulatory clarity has meant an inability for investors to ” stake ” their ether for yield. It’s still up 59% for 2024, but it’s trailing bitcoin at 126% and the rest of the crypto market, as measured by the CoinDesk 20 index, at 94%. Now there’s room for ether to run higher. It simply stands to gain more than bitcoin from the regulatory shift to come in 2025. “Ethereum use cases are more extensive than Bitcoin’s and do require clear rules of the road from regulators in order to fulfill its full vision, and that’s why the election outcome is even more important for Ethereum than it is for Bitcoin,” said Zach Pandl, head of research at Grayscale Investments — which manages the GBTC and ETHE ETFs. Mark Connors, head of global macro strategy at Onramp, said ether suffered from “middle child syndrome” this year as the market overlooked it in favor of its older sibling bitcoin and younger digital currency Solana. He also agreed that a friendlier regulatory environment under President-elect Donald Trump should boost its price in the coming months. “[The] Trump impact on bitcoin and crypto including ETH is not priced in yet,” he said. “We are seeing price discovery take place as we speak to determine the next price level.” Bitcoin, which has become more widely accepted as a store of value, is the crypto asset with the clearest regulatory status in the United States. By contrast, Ethereum needs to interact with traditional financial services firms for things like payments, tokenization and decentralized finance (DeFi). The supportive regulatory environment Trump promised will lead to growth in financial applications that hasn’t been possible in the U.S. under President Joe Biden, Pandl explained. “The fact that the election results went the way that they did means Ethereum has a strong chance of leading in tokenization, stablecoins and DeFi and really solidifying itself as the global settlement layer for finance,” he added. The market cap for stablecoins spiked 9.5% after the election and now stands at more than $180 billion. The market cap of Tether ( USDT ), which makes up 72% of the stablecoin market, increased 10% and USD Coin ( USDC ) grew 6% since Nov. 5. Ethereum is the main blockchain for both stablecoins. Matt Hougan, chief investment officer at Bitwise Asset Management — which also issues a bitcoin ETF ( BITB ) and an ether ETF ( ETHW ) — said he expects the new Congress to pass stablecoin legislation, which could take the market cap to more than $1 trillion in the next year or two. “You’ll see a shotgun start of major Wall Street firms who want to make sure they have a foot in the door in crypto, and we’ve seen that those firms tend to build on [Ethereum],” he said. JPMorgan’s Ethereum-based blockchain, dubbed Onyx, which allows for real-time cross-border money movement is one example. “[Ethereum] is the dominant chain for issuing stablecoins, it’s a dominant market for DeFi, it has been the favored public blockchain for large Wall Street firms to build on it,” Hougan added. “I’m not saying that Solana et al don’t do well as well from this regulatory shift, but I do think there’s specific catalyst for ETH coming out of this regulatory change that help explain why it’s rallying and why I think the outlook there is good.” To be sure, there’s an awareness gap among average investors of bitcoin versus ether. A Harris Poll conducted on behalf of Grayscale showed that while nearly all participants indicated some awareness of bitcoin, just around half were aware of Ethereum, he noted. “The reality is institutional is still getting its hands around bitcoin,” Hougan said. “While there is interest in ETH — and I think it will increase and I think we’ll see strong ETF flows in ETH in 2025 — it’s still exceptionally early on the institutional side.” “Bitcoin and other alternative assets are still probably front of mind, but ETH is a nice contrarian play,” he added. “It has long-term tailwinds behind it. I think it’ll be just fine.”
Ether could be crypto’s biggest Trump 2.0 beneficiary, after investors nearly abandoned it this year. Here’s why