The first quarters of a new year following a United States election and Bitcoin halving cycle have historically produced some of Ether’s best-performing quarters. According to data from CoinGlass, in Q1 2017, Ether rallied by an astonishing 518%, outpacing Bitcoin’s returns of 11.9%. In Q1 2021, Ether continued this trend, surging by 161% and leaving Bitcoin behind with a return of 103.2%.
A Brief History of Ether’s Quarterly Returns
| Year | Quarter | Ether Return (%) | Bitcoin Return (%) |
| — | — | — | — |
| 2017 | Q1 | 518% | 11.9% |
| 2021 | Q1 | 161% | 103.2% |
Spot Ether Exchange-Traded Funds (ETFs): A Potential Tailwind
One of the factors that could contribute to a strong Q1 in 2025 is the growing popularity of spot Ether ETFs. According to Farside Investors, these funds have seen inflows in 22 out of the last 24 trading days, with a net inflow of over $2.5 billion. This trend has led one optimistic analyst to predict that spot Ether ETFs could see over $50 billion of net inflows in 2025.
The Rise of Spot Ether ETFs
Spot Ether exchange-traded funds (ETFs) have been gaining momentum, with a significant surge in inflows in recent weeks. As of the last trading day, these funds have seen a net inflow of over $2.5 billion, according to Farside Investors.
Crypto Hedge Fund Expectations: A Boost for Ether?
Crypto hedge fund ZX Squared Capital’s chief investment officer, CK Zheng, is optimistic about the future of spot Ether ETFs and believes that inflows will "dramatically" increase in 2025. According to Zheng:
We expect the inflows will dramatically increase in 2025 when the new Trump administration issues more crypto-friendly rules and regulations to further boost the digital asset class in general.
A Hawkish Macro Climate: A Potential Obstacle for Ether
However, not everyone is as optimistic about Ether’s prospects. 10x Research founder Markus Thielen has a more bearish outlook, warning that a hawkish macro climate could slow down market momentum and prevent Ether from setting new all-time highs.
A Bearish Scenario: The Impact of a Hawkish Macro Climate
According to Markus Thielen:
We are projecting a more conservative outlook for 2025. The initial hawkish policy could be tested by diminishing liquidity tailwinds, unlike in previous years.
A Shift in the Crypto Market Cap
The crypto market cap has pulled back by 12.1% since the US Federal Reserve’s Federal Open Market Committee (FOMC) trimmed the number of projected interest rate cuts from five to two in a December 18 meeting. This shift could lead to a less favorable macro environment for risk-on assets like Bitcoin and Ether.
The Impact on Bitcoin
According to Thielen, even if Bitcoin does face challenges, it could still reach $160,000 in a "best-case scenario," although it is likely to fall to and stabilize around the $125,000 mark. Currently, Bitcoin is trading at $93,492, while Ether is priced at $3,997.
Conclusion
While history suggests that Ether has historically performed well in Q1 following a United States election and Bitcoin halving cycle, a hawkish macro climate could pose a significant challenge to market momentum. As the crypto landscape continues to evolve, investors will need to closely monitor developments and adjust their strategies accordingly.