Investing.com -- Standard Chartered (OTC:SCBFF) (StanChart) markedly revised its price forecast for Ethereum.
Citing the digital asset’s diminishing dominance in various sectors and increased competition from layer 2 blockchains, the firm cut its price target for Ethereum by 60%. The new end-2025 price target is now set at $4,000, down from the previous estimate of $10,000.
The bank’s analysts pointed to the Dencun upgrade, which took place in March 2024, as a turning point for Ethereum.
The upgrade led to lower fees and higher net issuance, a move that was initially expected to help Ethereum maintain market share. However, data on blockchain ’GDP’ indicates that not only have Ethereum’s fees decreased, but its share of blockchain activity is being eroded by layer 2 solutions, particularly Base, which passes its profits to its owner, Coinbase (NASDAQ:COIN).
StanChart estimates that Ethereum’s market cap has already diminished by $50 billion due to GDP losses to Base, and it projects further declines as Base solidifies its position among layer 2 platforms.
“Ethereum’s fees-to-GDP ratio has also fallen to a level equal to those of Base and the OP Mainnet. Ethereum has essentially commoditized itself within its self-created layer 2 framework,” said Geoff Kendrick, Global Head of Digital Assets Research at StanChart.
Moreover, Kendrick noted that while Ethereum’s security dominance could help it maintain an 80% share of the tokenized real-world assets market, this prospect is no longer sufficient to support a positive medium-term outlook.
“Only a proactive change of commercial direction from the Ethereum Foundation – such as taxing layer 2s – could achieve that now, in our view. We see this as unlikely,” he continued.
As such, StanChart expects the ETH-BTC ratio to fall to 0.015 by the end of 2027, marking its lowest point since early 2017, leading to a substantial year-end price cut to $4000.
The bank still predicts that Ethereum’s price in USD will rise from the current level of $1,900, as an anticipated increase in Bitcoin’s price is expected to lift the value of all major digital assets this year.
Nonetheless, the forecast signals continued underperformance for Ethereum. StanChart’s ETH price targets for 2026, 2027, 2028, and 2029 sit at $5000, $6000, $7500, and $7500, respectively.