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Crypto analyst Benjamin Cowen predicts Ethereum (CRYPTO: ETH) will start outperforming Bitcoin (CRYPTO: BTC) in 2025, signaling a potential shift in market dynamics for the two largest cryptocurrencies.
What Happened: Cowen analyzed historical patterns in the ETH/BTC ratio, suggesting Ethereum is nearing the end of its underperformance cycle against Bitcoin, in a recent Bankless podcast. He added, "I think Ethereum will start to outperform Bitcoin in 2025. I feel pretty confident about that."
Regarding Ethereum's price, Cowen suggested it could dip below $2,000 towards the end of the year before potentially bouncing back in 2025. He emphasized the importance of the Fed’s upcoming decisions, stating, "I think we’re likely going to see this pivot occur sometime in the next few months."
While maintaining a bullish long-term outlook on both Bitcoin and Ethereum, Cowen advised caution in the short term. He suggested investors consider rebalancing their crypto portfolios as market dynamics shift, potentially increasing Ethereum allocation closer to 20% by 2025.
Why It Matters: Cowen's analysis indicates the crypto market is currently living through a quantitative tightening phase, similar to 2019. He expects this phase to transition into a quantitative easing phase as the Federal Reserve pivots its monetary policy.
The analyst pointed to correlations between crypto market movements and macroeconomic factors like interest rates and the Fed’s balance sheet. "Monetary policy plays an important role in exactly how the cycle plays out," Cowen noted.
The analyst concluded with a warning that investors should conduct their own research and consider their risk tolerance when making investment decisions
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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