In an x thread today, January 20, Dennis Liu (@VirtualBacon0x), General Partner at Momentum 6, <a target="_blank" href="https://x.com/VirtualBacon0x/status/1881121619210362886″ target=”_blank” rel=”noopener nofollow”>presented a bold forecast for ethereum (eth), suggesting the world's second-largest cryptocurrency could reach a price target of $14,000 by the end of 2025. Liu also argues that the next six months will be crucial, highlighting eth's potential to “dominate the market” until June.
“ethereum is about to dominate the market, you don't want to miss this window,” Liu wrote. “ethereum has lagged bitcoin this cycle, but that is about to change. I think eth will shine in the next 6 months.”
Why ethereum Could Outperform the Market
Despite the growing adoption of eth, Liu maintains that its poor performance relative to bitcoin is due to “institutional timing.” According to him: “eth is institutionally driven, unlike bitcoin or retail-favored altcoins. “ETFs provide stability and utility, making eth ideal for institutional investors.” Liu suggests that institutions have been waiting for market conditions to improve and sees 2025 as the year these conditions finally align.
Liu also points to the US Federal Reserve's policy changes as a catalyst for eth's growth. He notes that since May 2024, the Federal Reserve has been slowing reductions to its balance sheets, and a possible shift toward renewed liquidity injections could occur after the Federal Open Market Committee (FOMC) meetings on January 29 or 19. of March.
“Since May 2024, the Federal Reserve has slowed balance sheet reductions, signaling a turnaround. A liquidity boost could follow the FOMC meetings on January 29 or March 19. Why it matters: Fed liquidity pumps historically drive eth/btc higher.” He concludes that such a move by the Federal Reserve “means that eth outperformance” could be on the horizon.
Citing a decade of market data, Liu claims that eth typically outperforms bitcoin from January to June, while bitcoin tends to lead from July to December. “From January to June, eth consistently outperforms bitcoin. …If you have eth, now until June is historically the best window to make profits.”
Liu also highlights the Trump administration's potential pro-eth sentiments, referencing the former president's nft collections and DeFi platform built on ethereum: “His nft collections and DeFi platform are built on ethereum. The Trump administration plans to replace the leadership of the SEC, reviewing anti-DeFi rulings. “Institutional optimism increased after Trump’s election victory in November 2024, boosting ETF inflows.” He concludes that “pro-crypto policies will directly benefit ethereum-centric DeFi.”
Further emphasizing ethereum’s institutional strength, Liu points to real-world asset (RWA) tokenization initiatives by large companies like BlackRock and prominent DeFi platforms like AAVE, MakerDAO, and OriginTrail: “ethereum is not leading the trends of meme or ai coins: it is driving serious institutional growth.”
Liu highlights a notable change in ethereum ETF inflows, which turned positive in November 2024 after a period of outflows: “ETFs added $6 billion in net inflows from November to January, or 0.76% of the eth/month supply. …Institutions are purchasing more eth than btc on a monthly basis, indicating growing confidence in ethereum as an asset.”
Projecting out to 2025, Liu believes eth could quadruple to $14,000 if bitcoin doubles to $200,000, citing ethereum's historical tendency to outperform bitcoin by an additional factor of two: “If bitcoin doubles to $200,000, eth could multiply by 4, to $14,000, following its historical outperformance (2x more than btc… While returns). “Declining gains may limit upside, eth remains a high-conviction play for this cycle.”
In summarizing his outlook, Liu emphasizes that a confluence of factors, from renewed liquidity from the Federal Reserve to potential pro-DeFi policies, creates a near-term window of opportunity for ethereum: “With ETF inflows increasing, the possible liquidity injection from the Federal Reserve, Trump's pro-DeFi strategy stance and eth's seasonal strength, all catalysts are aligned. … ethereum's time to shine is now until June. “I’d rather be overexposed than miss this opportunity.”
At the time of this publication, eth was trading at $106,929.
Featured image created with DALL.E, chart from TradingView.com
