From cointelegraph by Ciaran Lyons

Ether’s price could hit a peak of $12,000 this year, a gain of 257% from its current price fuelled by Donald Trump’s first year of his presidency and a key network upgrade, says options DeFi protocol Derive head of research Dr. Sean Dawson.

Dawson told Cointelegraph that the “bullish case” for Ether ETH$3,362.13 would see it hit $12,000 by the end of the year if Ethereum is successful with its Pectra update, adding “a regulatory-friendly environment under the Trump administration would further support growth.”

At the time of publication, CoinMarketCap shows Ether is trading at $3,361.

All eyes on Ethereum’s Pectra Upgrade

Ethereum’s Pectra upgrade, slated for launch in the first quarter of 2025, is expected to increase the network’s efficiency and scalability.

Dawson said Ethereum must achieve “broader adoption” with real-world assets (RWAs), more significant inflows into exchange-traded funds (ETFs), and expand its utility in emerging sectors such as DePIN and AI agents.

Matt Hougan, Bitwise’s head of research, recently told Cointelegraph that Ethereum and Base, an Ethereum layer-2 scaling network, are “where many AI agents are currently operating.”

Dawson said the growth of layer 2 solutions with enhanced interoperability “could drive significant gains” and a “regulatory-friendly environment under the Trump administration would further support growth.”

Options market “tells a more bullish story”

ETH has been consolidating around the $3,500 mark since Dec. 20, but Dawson said that the options and derivatives market “tells a more bullish story.”

“On Derive.xyz, there’s a significant skew toward call options, with 250% more calls in open interest compared to puts. This signals strong bullish sentiment, as traders are seeking upside leverage through these options.”

However, Dawson cautioned that in a “bearish case,” Ether’s price could drop below $2,000.

He said this could happen if the spot Ether ETF fails to “attract institutional interest, perhaps losing ground to a successful Solana ETF.”

Related: Crypto bull market entering final stage: CryptoQuant

He warned that Ether’s market share “is being challenged” by other layer-1 blockchains, which may offer higher risk and reward opportunities.

“In a bull market, investors often prefer assets with the potential for dramatic gains,” Dawson said.

The number of long-term Ether holders steadily increased throughout 2024, while the number of Bitcoin BTC$95,710 holders fell over the last year amid rising confidence in ETH heading into the new year. 

On Dec. 30, IntoTheBlock shared that the total percentage of Ether who had held their tokens for the long haul had risen from 59% in January to 75% by the end of 2024.