5 Reasons to Be Optimistic About Ethereum in the Long Term

Ethereum, the second largest blockchain network in the world by market capitalization, is facing sideways price action at the beginning of 2025. However, many developers, investors, and analysts still believe in its long-term value. From infrastructure upgrades to token standards and the growing interest of institutions, several key developments indicate that Ethereum may be well-positioned for sustainable growth.

1. A plan to simplify Ethereum and enhance the performance of Vitalik Buterin Ethereum co-founder Vitalik Buterin recently proposed replacing the Ethereum Virtual Machine (EVM) with a new execution environment based on RISC-V, an open-source instruction set architecture. The goal is to simplify Ethereum's codebase, making it faster and easier to maintain while still supporting existing smart contracts. Buterin believes that this could lead to a 100-fold increase in proof of non-knowledge, which is key to scaling and privacy. He also mentioned that the network could become "almost as simple as Bitcoin" within five years, making Ethereum more neutral and reliable as a global base layer. Although this plan has risks such as breaking backward compatibility and requiring retraining of developers, it signals a serious effort to reduce complexity and improve the long-term sustainability of Ethereum.

2. The role of Ethereum in the tokenization of real-world assets Institutional interest in Ethereum is growing. One example is BlackRock's plan to tokenize $150 billion of U.S. Treasury assets, a move that will bring traditional financial products to the blockchain. These transactions are expected to take place on-chain, and Ethereum is widely regarded as the network of choice. If this happens, it could increase the total value locked (TVL) of Ethereum by up to 4 times, from 52 billion dollars to over 200 billion dollars. This will strengthen Ethereum's leading position in decentralized finance (DeFi), where it has far outperformed other networks like Solana. More importantly, BlackRock's success could create a domino effect, encouraging other institutions to bring their assets onto the blockchain—and possibly on Ethereum.

3. Ethereum is increasingly focusing on interoperability Ethereum developers are actively working to improve cross-chain communication. Two new token standards, ERC-7828 and ERC-7930, are being developed to help applications, wallets, and block explorers understand token data more clearly. ERC-7930 introduces a compact binary format for cross-chain addresses, while ERC-7828 adds a human-readable version. These changes aim to create a unified, simpler user experience across Ethereum-compatible chains. This interoperability is crucial as the blockchain ecosystem becomes more interconnected. If widely applied, these standards could minimize user errors, improve wallet compatibility, and help Ethereum continue to be the dominant base layer for cross-chain applications.

4. On-chain metrics indicate accumulation The Z MVRV score of Ethereum, an important on-chain indicator, has returned to its historical accumulation zone, indicating that ETH may be trading close to its cycle bottom. In previous cycles, similar indicators occurred just before prices surged for many months or even years, including at the end of 2018, March 2020, and mid-2022. This does not guarantee that the price will move in any direction, but it shows that many long-term holders of Ether are accumulating Ether at the current level. Such behavior often reflects increasing confidence in the future potential of the network, regardless of short-term volatility.

5. Ethereum Layer 2 projects are making significant progress The Ethereum rollup-based expansion strategy continues to show results. This week, the Layer 2 project Scroll announced that it has become the first zk-rollup to allow users to exit independently without relying on a central sequencer. This milestone brings Scroll closer to complete decentralization and improves user trust. The Ethereum ecosystem now includes several Layer 2 solutions, such as Optimism, Arbitrum, zkSync, and StarkNet. Together, they enable Ethereum to be more scalable and affordable while maintaining strong security from the Ethereum mainnet. These developments are part of Ethereum's broader efforts to become the platform for all types of digital activities, from finance to identity, gaming, and real-world asset payments.