Analysts debate Ether's potential Q1 pump despite macro concerns

Ether (CRYPTO:ETH) could lead a rally in Q1 2025, according to historical trends, but some analysts remain cautious about its performance due to a "hawkish" macroeconomic environment.

Data from Coinglass shows that the first quarter after U.S. elections and Bitcoin (CRYPTO:BTC) halving cycles has historically been strong for Ether, with notable gains in Q1 2017 and Q1 2021, where Ether surged 518% and 161%, respectively.

These gains outpaced Bitcoin’s performance during the same periods.

Spot Ether exchange-traded funds (ETFs) have seen net inflows of over $2.5 billion in 22 of the last 24 trading days in 2024, signaling growing interest in Ether.

Some analysts predict that Ether ETFs could experience net inflows exceeding $50 billion in 2025.

CK Zheng, chief investment officer of ZX Squared Capital, is optimistic about the outlook, forecasting a significant increase in inflows in 2025, particularly with the expectation that the new Trump administration will introduce crypto-friendly regulations.

However, not all analysts share this view. Markus Thielen, founder of 10x Research, expressed concerns about a "hawkish" macroeconomic climate.

He warned that diminishing liquidity and tighter monetary policies could hinder Ether’s performance in 2025, preventing it from reaching new all-time highs.

The U.S. Federal Reserve’s decision to cut projected interest rate cuts for 2025 from five to two in its December meeting has contributed to this cautious outlook.

As a result, the federal funds rate could peak at 3.9% in 2025, which may affect the performance of risk assets like Ether and Bitcoin.

Despite the uncertainty, Thielen remains positive about Bitcoin’s potential, projecting a best-case scenario of $160,000, though he expects it to stabilise around $125,000.

At the time of reporting, the Ethereum price was $3,416.31.