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Standard Chartered slashes Ether’s year-end target from $10K to $4K

Standard Chartered slashes Ether’s year-end target from $10K to $4K

  • 17.03.2025 17:14
  • cryptobriefing.com
  • Keywords: Ethereum, Standard Chartered

Standard Chartered cut its Ether year-end target to $4,000 from $10,000 as layer 2 blockchains like Base attract users and activity away from Ethereum's mainnet. This shift has reduced Ether's market cap by $50 billion.

Coinbase ReportsSCBFFsentiment_dissatisfiedCOINsentiment_satisfied

Estimated market influence

Standard Chartered

Standard Chartered

Negativesentiment_dissatisfied
Analyst rating: Buy

The bank revised its target price for Ethereum and noted the decline in market dominance due to layer 2 solutions.

Coinbase

Coinbase

Positivesentiment_satisfied
Analyst rating: Buy

Base's profit-sharing model, owned by Coinbase, is seen as effective competition strategy.

Context

Analysis and Summary: Standard Chartered's Ethereum Price Target Revision

Key Takeaways

  • Price Target Adjustment: Standard Chartered reduced its Ether year-end target to $4,000 from $10,000 due to structural decline.
  • Market Cap Decline: Layer 2 blockchains have caused a $50 billion reduction in Ethereum's market cap.

Market Trends and Business Impact

  • Layer 2 Competition: Layer 2 solutions like Base are attracting users and activity away from Ethereum's mainnet, reducing its dominance.
  • Dencun Upgrade Impact: The Dencun upgrade has not helped Ethereum maintain its market dominance as expected.
  • Tokenization Growth: Ethereum's strong security framework could allow it to maintain an 80% market share in tokenizing real-world assets.

Competitive Dynamics

  • Base's Strategy: Base’s profit-sharing model with Coinbase is seen as a highly effective competitive strategy, diverting economic value from Ethereum.
  • Ethereum Dominance Decline: While Ethereum still leads in key blockchain metrics, its dominance has been steadily declining.

Strategic Considerations

  • Proactive Changes Needed: Geoff Kendrick suggests that the Ethereum Foundation (EF) could counteract layer 2 competition by implementing strategies like taxing layer 2 solutions. However, he believes EF is unlikely to change its business model.
  • ETH/BTC Ratio Projection: Standard Chartered forecasts the ETH/BTC ratio to fall to 0.015 by 2027, marking a significant decline.

Long-Term Effects and Price Projections

  • Price Recovery Outlook: While Ethereum is expected to recover due to broader Bitcoin-led rallies, it will likely continue underperforming compared to Bitcoin.
  • Historical Projections: Last year's targets were $8,000 by 2024 and $14,000 by 2025, which have not been met. The current price is around $1,900, down 42% YTD.

Upcoming Developments

  • Pectra Upgrade: Ethereum's next major upgrade, Pectra, aims to enhance network performance and introduce new features like EIP-7702 and EIP-7251. It is scheduled for release in April 2024.

Conclusion

The shift to layer 2 solutions and competitive strategies by projects like Base are significantly impacting Ethereum's market position. While Ethereum retains strengths, such as its security framework and tokenization potential, the long-term structural decline suggests challenges ahead unless proactive changes are made.