Key Points
- Analysts at Bernstein predict an improvement in Ethereum staking yield with a pro-crypto US President.
- Ethereum’s performance has exceeded Bitcoin and Solana’s in the past month, with a growth of 46%.
Analysts at Bernstein, a research and brokerage firm, anticipate that the inauguration of Donald Trump in 2025 could lead to the approval of spot Ethereum Exchange-traded Funds (ETFs) in the United States.
This potential administration is one of four factors contributing to a renewed interest in Ethereum.
The total capitalization of the wider crypto market is approximately $3.37 trillion.
Although this metric has decreased by 1.54% in the past 24 hours, it has surged by 45% since Trump won the presidential election.
Bitcoin and Ethereum Prices Soar
Bitcoin’s price soared following the election result, with Ethereum also experiencing a slight increase.
Over the past month, Ethereum’s price has risen higher than that of Bitcoin and Solana.
While Bitcoin and Solana saw increases of 41% and 36% respectively, Ethereum grew by 46%.
Even Ripple-associated XRP outperformed Solana’s market cap after increasing by up to 358% during the same period.
However, in terms of year-to-date value, Ethereum is still lagging.
Ethereum’s Struggles and Potential
Bernstein analysts, led by Gautam Chhugani, suggest that Ethereum is struggling to become a store of value like Bitcoin.
It also faces stiff competition from other Layer-1 blockchains.
Ethereum’s dependence on Layer 2 solutions for scaling also fragments the user experience, potentially driving retail users to other blockchains believed to be faster.
Despite its underperformance, Bernstein analysts believe Ethereum’s risk-reward is becoming more attractive.
This could gradually drive more traction to the coin.
The analysts identified four critical catalysts that could drive Ethereum’s growth in this cycle.
One such factor is the potential for staking yield, which was initially removed from the US spot Ethereum ETF approvals.
With a pro-crypto president in the US, this feature might be reintroduced to the spot Ethereum ETF offering.
“We believe, under a new Trump 2.0 crypto-friendly SEC, Ethereum staking yield will likely be approved,” the analysts stated.
Global Interest in Ethereum Staking
Interestingly, Hong Kong regulators are also considering approving staking features for spot Ethereum ETFs.
They believe this step will give them a global competitive edge in crypto, especially in the US.
Therefore, US regulators may need to quickly implement the staking feature to maintain their dominance in the market.
The Bernstein analysts noted that Ethereum’s yield, currently at 3%, could rise as high as 5%, driven by blockchain activities.
This would offer attractive returns for investors while benefiting asset managers through improved ETF economics.
Meanwhile, Ethereum ETF inflows are strengthening daily, suggesting a renewed interest in the offering.
