Factors expected to influence Ethereum price in 2025

Wondering why Ethereum’s price changes so often? Let’s look at how its price works, what factors influence it, and why it fluctuates so much. 

For years, Bitcoin has held the top spot as the world’s largest digital currency by market cap. It carried worth among investors due to its status as a digital value store enabling global transactions. However, it’s not the only cryptocurrency that has created buzz in the sector; Ethereum also has a great value proposition, even if it has a lower market capitalization. 

A number of factors influence the ETH price, and this article is dedicated to them so that new investors can better understand them. 

Let’s get informed on the factors that impact Ethereum (and not only) prices. 

Marketplaces

The marketplaces influence Ethereum’s value because it can be exchanged for other digital currencies or traditional money in worldwide marketplaces. Ethereum is globally available, and the high number of options available for trading and exchanging affects its price. When new projects are introduced, the public waits to see if marketplaces adopt them, which influences their price evolution. However, this is no longer the case with Ethereum, a well-established asset that can be traded on all marketplaces. When a marketplace lists a cryptocurrency, it signals that it’s trustworthy and has a large following. By listing it, it makes it available to the broad public, boosting its demand. 

Investors usually add cryptocurrencies to their portfolios when big exchanges begin listing them so they can gain a return from their price movements. Ethereum is available on the most popular exchanges, so many investors purchase it. 

Node count

The node count is another factor that influences a cryptocurrency’s value because it offers information about the number of active wallets on the blockchain. Ethereum has a high node count because it has a strong community. The node count also proves that Ethereum has a high level of decentralization and a strong network, which are two characteristics that position it among the top-selling projects in the crypto sector. 

Public hype

Hype also influences a digital currency’s demand, and Ethereum is one of the most hyped assets in the sector, especially after it transitioned from the Proof-of-Work to the Proof-of-Stake consensus. While Ethereum has numerous use cases that attract investors, other digital currencies, such as meme coins, have no value driver other than their emotional impact on the public. 

Ethereum and Bitcoin make headlines the most often, so they also experience the most price hikes because speculators use to purchase assets according to the hype created around assets. When the public talks about a cryptocurrency like Ethereum, investors take it as a sign that it has the potential to grow in price, and they usually add it to their portfolios. And as expected, a price growth will also trigger more hype and demand in return, further boosting the price.

However, when a cryptocurrency is the victim of hype, it can cause the investors to sell their assets for a profit, which triggers a price drop. Ethereum went through several such periods when the price registered dramatic price fluctuations resulted from hype. 

Cost of production

Considering that cryptocurrencies rely on different production mechanisms, this is another essential factor to consider when evaluating Ethereum’s value. Ethereum has migrated from the Proof-of-Work to the Proof-of-Stake consensus mechanism, and it has become one of the most sustainable blockchains in the sector. 

The cost of production usually impacts a cryptocurrency’s price, but it doesn’t apply to all digital assets. Therefore, if you’re interested in purchasing Ethereum, make sure you research what the Proof-of-Stake mechanism means. 

As mentioned earlier, Ethereum is the second largest digital currency on the market, so it has plenty of competition. Several altcoins have surfaced as solutions to provide better services than Ethereum with networks that function similarly. Binance Smart Chain is such an example of project that offers services similar to Ethereum but with lower transaction costs. Other worthy competitors are Cardano, Solana, and Neo that have grew over the years and gain significant popularity among investors. 

As the subject of Ethereum surpassing Bitcoin has always been a hot one, other altcoins surpassing Ethereum also captured people’s attention. However, considering the number of applications, services, and products available on the blockchain, it would be quite challenging for another network to surpass it. 

Most altcoins have similar features because they target the same industry and have common use cases. Ethereum has the widest selection of use cases, and it’s often the point of inspiration for new projects. 

Competition, however, doesn’t come only from the crypto sector. Traditional money and other commodity categories also challenge Ethereum’s status as a tool worthy of being part of an investment portfolio. 

Supply and demand

Ethereum went through several bull and bear markets, and its price varied dramatically over the years. Why does it suffer such drastic fluctuations? It’s easier to understand how supply and demand impact it if we’re using an example. Let’s say that during a bullish period, a whale decides to sell all of their ETH holdings. The market comes flooded with ETH coins, so there is a higher supply than normal. In case the market demand is high, the price will increase or stay the same, but if there are no investors interested in purchasing such a high amount of ETH, the cryptocurrency’s price will drop. 

On the other hand, when the public is interested in buying Ethereum but the supply is too low to match the demand, the price drives up. Supply and demand are fundamental factors in impacting cryptocurrencies’ value. 

Final words

Do you have it figured out why Ethereum’s price fluctuates so much? A series of factors like those exposed in this article influence it. And at the end of the day, Ethereum, similarly to all the other digital currencies, is a speculative asset which relies on the market’s sentiment. Therefore, people’s feelings and emotions can impact their evolution.