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

Key Takeaways

Standard Chartered diminished its Ether year-end target to $4,000 due to a structural decline.
Layer 2 blockchains have contributed to lowering Ether’s market cap by $50 billion.

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Standard Chartered predicted that Ethereum may hit $10,000 by the tip of 2025 in a forecast made in January. Now the financial institution has revised its year-end target for the digital asset, lowering it by 60%.

According to a report launched at the moment, the adjustment relies on Standard Chartered’s remark that Ethereum is going through growing competitors from layer 2 options, prominently Base. Plus, Dencun, Ethereum’s latest improve, doesn’t assist the community keep its market dominance.

Standard Chartered acknowledged that Ethereum nonetheless leads in lots of key blockchain metrics, however its dominance has declined over time.

Layer 2 blockchains, initially designed to assist Ethereum by bettering scalability and lowering transaction charges, have shifted financial worth away from Ethereum, the report famous.

Base’s mannequin of sharing earnings with its proprietor, Coinbase, is seen as a very efficient aggressive technique. Standard Chartered estimates it has triggered Ethereum’s market cap to decline by $50 billion and expects this downward development to proceed.

“Ether is at a crossroads,” the report stated, noting that whereas it “still dominates on several metrics,” this dominance has been declining.

Despite ongoing challenges, Standard Chartered sees the tokenization of real-world property as a possible progress driver for Ethereum.

According to the financial institution, Ethereum’s robust safety framework may permit it to keep an 80% market share on this rising sector, which may stabilize and even reverse its structural decline.

Geoff Kendrick, head of digital property analysis at Standard Chartered, means that “a proactive change of commercial direction from the Ethereum Foundation,” like taxing layer 2 options, may assist counteract the continuing lack of worth to these networks. However, he believes the EF is unlikely to change its enterprise mannequin.

Standard Chartered forecasts the ETH/BTC ratio to fall to 0.015 by year-end 2027, which might mark its lowest degree since 2017.

While the financial institution expects Ether’s value to get well from present ranges due to a broader Bitcoin-led rally lifting all digital property, it maintains that Ether will proceed to underperform.

Last 12 months, Standard Chartered projected that Ethereum would attain $8,000 by the tip of the present 12 months and $14,000 by the tip of 2025.

Analysts on the financial institution believed that the first catalyst for these value will increase could be the approval of spot Ethereum ETFs within the US. They additionally thought of the Dencun improve as one other constructive issue contributing to Ethereum’s potential value progress.

Earlier this 12 months, Standard Chartered predicted that Ethereum may attain $10,000 by the tip of 2025 because of a positive setting for crypto progress beneath the brand new administration.

Ethereum traded at round $1,900 at press time, up barely within the final 24 hours, per TradingView. The digital asset is down round 42% year-to-date and continues to be 60% off its all-time excessive.

Ethereum’s subsequent main improve is the Pectra improve, which is scheduled to go stay on the Ethereum mainnet subsequent month. This improve goals to improve community efficiency, enhance validator participation, and introduce a number of key options like EIP-7702 and EIP-7251.

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