Cardano vs Ethereum – Is ADA Primed for a Rotation Rebound in 2025?

Cardano and Ethereum are locking horns again—but this time, ADA might just have the edge.

With Ethereum's gas fees still giving traders nightmares, Cardano's leaner, proof-of-stake architecture is turning heads. Could 2025 be the year ADA flips the script?

The smart money's watching.

Meanwhile, Ethereum's layer-2 band-aids keep stacking up—because nothing says 'scalability' like duct-taping solutions onto a creaking blockchain. Classic finance, right?

Source: TradingView (ADA/ETH)

Such a divergence that not only underscores ADA’s underperformance, but also points to Ethereum’s strength as a major driver behind ADA’s broader structural weakness this year.

Why does this matter? The ADA/ETH ratio is a critical gauge of capital rotation into Cardano. Consider November’s rally as an example here. ADA rallied by 286% from its election-day low to a December high of $1.32. 

In contrast, ETH posted gains of 68% during the same period, while the ADA/ETH ratio spiked by 166%. This hinted at a clear inflow of capital favoring Cardano over Ethereum. 

Therefore, until this ratio shows signs of reversal or stabilization, cardano is likely to remain on the sidelines in terms of relative momentum and market positioning.

Cardano builds quietly as Ethereum cools

There’s no doubt, for Layer-1 blockchains, the real endgame isn’t short-term price pumps. Instead, it’s building resilient infrastructure that solves real problems. That’s what ultimately pulls in institutional capital.

Cardano seems to be leaning into that vision.

Based on GitHub data, Cardano is now ranked 4th in developer activity, far ahead of Ethereum at 13th. This suggested that Cardano has been prioritizing protocol refinement, scalability, and on-chain utility.

Source: Santiment

True, Cardano hasn’t delivered a headline-grabbing upgrade like Ethereum’s Pectra, which drove ETH’s 36% rally in Q2. However, its developers are steadily building under the surface.

That quiet momentum is starting to show on-chain – Daily active addresses on Cardano jumped by 24.6% over the past week, while Ethereum saw a 14% drop to 453k.

Structurally, this shift could be significant. 

While Ethereum captured the spotlight with its Pectra-driven “hype,” Cardano’s underlying activity has been gaining strength. If this trend persists, it WOULD strengthen the case for a mean-reversion in the ADA/ETH pair.