4 Reasons to Buy Ethereum in 2025

Recently, all eyes have been on Bitcoin, which makes perfect sense since it regained its six-figure valuation. However, the fact that Ethereum (ETH) has outrun Bitcoin by about 10% since November last year is going unnoticed by many crypto investors. However, unlike Bitcoin, Ethereum is still below its all-time high. This is an indication of a much brighter future for the second-biggest cryptocurrency. In this article, we’ll outline four reasons why you should buy Ethereum in 2025. 

1. Ethereum still dominates decentralized finance (DeFi)

ETH is by a mile the biggest blockchain on DeFi. According to this report by DeFi-Llama, about 57% of the Total Value Locked (TVL) are ETH smart contracts. This is to say that over 50% of all blockchain-based staking, lending, and trading belongs to ETH. 

In addition, ETH has a bigger market value than its DeFi competitors, such as BNB coin and Solana. However, its market value to TVL ratio is lower compared to that of its DeFi rivals. A lower value implies a better value. If you are looking to invest in cryptocurrency in 2025, be sure to consider buying ETH. 

2. The Federal Reserve’s interest rate is still low

As widely expected, the Federal Reserve decided to keep the interest rate at a steady 4.25% to 4.5% during their January 2025 meeting. This is after three consecutive interest rate cuts in 2024 (from 5.5% in August to 5% in September, 4.75% in November, and 4.5% in December). The decision to keep the interest rate low could lead to a possible shift towards a more risk-on environment, such as investing in speculative assets like cryptocurrencies. 

When interest rates are low, investors are motivated to drop low-yield assets, such as bonds and bills, and seek high-risk, high-reward assets. Cryptos, particularly the ones tied to DeFi platforms such as Ethereum, are going to benefit from this shift. The last time there was a rate-cutting cycle was in 2019, and it basically ended ETH’s poor performance and laid the footing for ETH’s next leg up. It went on to reach its all-time high in 2021. 

3. Spot Ethereum ETFs are becoming popular

ETH has spot ETFs (exchange-traded funds), and they are gaining traction. Spot Ethereum ETFs were first traded on the United States stock market in July last year. This was the second crypto after Bitcoin to achieve such a feat. It is important to note that spot ETFs invest in the assets they track. For instance, if you buy Ethereum ETF shares, that money is used to buy real ETH. 

Big names such as Fidelity and BlackRock have had huge success with Bitcoin ETFs since they were launched in January 2024. However, Ethereum ETFs are catching up. On February 4, 2025, ETH funds had their third largest daily inflows since they were launched, with $307.77 million in net inflows. On the same day, $340.82 million was poured into Bitcoin ETFs. 

4. Decentralized apps will continue to grow

One of the major things that make ETH different from Bitcoin is its open-source network. While Bitcoin’s blockchain is solely used to mine Bitcoin, developers can use the ETH’s open-source network to create tokens, decentralized apps, and other crypto assets. 

Fortune Business Insights predicts that decentralized apps will continue to grow at a compound yearly growth rate of about 28% from this year to 2030. This is mainly because more companies will continue to introduce decentralized lending, investing, and other crypto services that are not tied to central financial institutions. Such an expansion will result in more consumers and companies embracing ETH as a mainstream digital currency. 

Endnote

While ETH is unlikely to reach its all-time high in the short term, it’s still a great addition to your investments, especially if you are looking into the long term.