Ethereum is currently trading 35% below its all-time high of $4,954 from August.
New regulatory changes, especially those related to staking, could create new momentum for Ethereum investment products.
A new blockchain upgrade in December could lead to a surge in user activity for Ethereum.
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Following a brief stumble after summer, Ethereum(CRYPTO: ETH) is showing signs of a recovery. While it’s still down nearly 7% for the year, Ethereum has finally stabilized around the $3,000 to $3,100 price level.
Three important catalysts have the potential to propel Ethereum in 2026. If you’ve been debating whether or not to add some Ethereum to your crypto portfolio, here’s what you need to watch.
If there’s one thing Ethereum does well, it’s new blockchain upgrades. Unlike other cryptocurrencies, Ethereum actually has a long-term strategic roadmap that outlines when and how new blockchain upgrades will occur.
Image source: Getty Images.
In 2022, Ethereum completed The Merge, transforming from a proof-of-work blockchain into a proof-of-stake blockchain. In 2023, the Shapella upgrade occurred. In 2024, there was the Dencun upgrade. And in May of this year, there was the Pectra upgrade.
Coming in December is the new Fusaka upgrade. This is being heralded as the biggest Ethereum blockchain upgrade in years. It’s easily the biggest since The Merge. Without delving too deeply into the technical details, Fusaka aims to enhance the Ethereum blockchain’s speed, efficiency, and cost-effectiveness. That should result in a surge of new blockchain activity.
Another big catalyst involves the improving regulatory environment for crypto. The Trump administration promised a pro-crypto regime, and that’s exactly what it has delivered in 2025.
Ethereum is now part of a new digital asset stockpile created by the Treasury Department in March. There is also a new regulatory framework for stablecoins (i.e., cryptocurrencies that are pegged 1:1 to the value of the U.S. dollar). Next up is a comprehensive piece of legislation that outlines the regulation of digital assets within the U.S. marketplace.
But the really big news may be a new approach to staking, which was once a popular way for investors to earn passive income on their cryptocurrency investments. However, after a SEC crackdown on staking in 2023, it has largely faded from public view.
But that could be changing soon. Both the Treasury Department and the IRS are working on new rules for staking, particularly as they relate to the creation of new investment products. The biggest impact will be on proof-of-stake blockchains such as Ethereum.
As a result, major Wall Street firms are now mulling the introduction of new staking-enabled Ethereum products, including new staking-enabled exchange-traded funds (ETFs). This should help to build long-term demand for Ethereum, sending its price higher.
It’s been difficult this year to make sense of what’s really happening with the U.S. economy. Is it growing or not? Is inflation on the rise or not? And are tariffs helping or hurting?
As a result, cryptocurrencies such as Ethereum have tended to rise and fall with each new development in this unfolding economic drama. In April, for example, cryptocurrencies plummeted as soon as the new worldwide tariffs were unveiled at the White House. At the same time, even the vaguest hint of a new Fed rate cut can send digital assets soaring.
The good news is that the economic situation appears to be stabilizing as we head into 2026. New rate cuts are on the imminent horizon, and liquidity continues to be pumped into the system. A new Fed chairman, too, might be more amenable to a pro-growth economic agenda for crypto.
All of this activity can be safely lumped under the heading “macroeconomic tailwinds.” Long story short — the White House appears to have its eye on the prices of major cryptocurrencies such as Bitcoin and Ethereum, and isn’t going to let the market decline too far without getting involved.
The all-time high for Ethereum is $4,954, which it hit in late August. To simplify the math, let’s just call this $5,000.
The conventional wisdom now is that Ethereum is once again on a path to regain the $5,000 price level. It’s not clear how long this will take, but according to Tom Lee of Fundstrat, Ethereum could be coasting to a price of $9,000 by the end of next year.
So, if you’ve been on the fence about Ethereum, now might be the time to buy the dip. If you wait too much longer, you might miss out on a splendid opportunity to buy the world’s second-largest cryptocurrency on the cheap.
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Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
3 Reasons to Buy Ethereum Before January 2026 was originally published by The Motley Fool
