10x Research: ETH is expected to underperform BTC again in 2025, and is not optimistic about the Pectra upgrade

Markus Thielen, head of research at 10x Research, said in a recent market report: "While the possibility of new catalysts cannot be ruled out, we would not be surprised if Ethereum struggles to achieve a meaningful rebound in 2025. Although we understand Ethereum's volatility, we believe it is still a poor medium-term investment and expect ETH to underperform BTC again in 2025. Therefore, our position on Ethereum remains clear: 'avoid'." Thielen said that one of the most noteworthy indicators in 2025 will be the trend of active validators. However, he pointed out that the 1-month growth rate of Ethereum validators has turned negative, down about 1% in the past 30 days, raising concerns about the increased risk of more validators exiting the network. Thielen said that the increase in unstaking seems "logical" and he believes that Ethereum lacks "real demand" beyond staking. He also said that Ethereum’s Duncan upgrade in March last year (which reduced the network’s gas fees and allowed it to process more transactions) was “six months late” and missed the peak of the Meme coin rally, causing the market to “shift” to the “more cost-effective” Solana alternative. He is also skeptical of the Pectra upgrade scheduled for early 2025, “of the 19 upgrades to date, only two have had a clear positive impact on ETH prices, and these upgrades all occurred during the Bitcoin bull market.” He added: “The three major catalysts for Ethereum in 2024 have basically failed and have not brought much value overall.”