Standard Chartered has dramatically cut its Ethereum price prediction for 2025, lowering the target from $10,000 to $4,000. The bank’s latest forecast, disclosed in a March 17 research note, marks a 60% reduction in its earlier price outlook. Analysts at Standard Chartered attribute the downgrade to Ether’s “structural decline” amid growing competition from layer-2 scaling networks, even as the cryptocurrency currently trades near $1,900.
Layer-2 Networks Siphon Value
The bank’s research pointed to intensifying competition from Ethereum layer-2 solutions as a primary factor behind the revised forecast. These scaling networks – notably Coinbase’s Base – were designed to reduce congestion and fees on Ethereum but have instead ended up diverting users and economic activity away from the main blockchain. Standard Chartered’s report estimates that Base’s launch alone has effectively wiped out about $50 billion from Ether’s market capitalization by moving transactions and fee revenue off the Layer-1 network.
Even Ethereum’s recent “Dencun” upgrade, intended to improve performance, failed to halt the erosion of Ethereum’s dominance.
Official Outlook from Standard Chartered
In its report, the bank described Ether’s predicament bluntly: “Ether is at a crossroads,” acknowledging that while Ethereum still leads on several blockchain metrics, its lead has been steadily shrinking over time.
“We expect ETH to continue its structural decline,” wrote Geoff Kendrick, Standard Chartered’s head of digital asset research. He suggested that only a major shift in Ethereum’s strategy – for instance, the Ethereum Foundation imposing fees or taxes on layer-2 activity – might counteract this trend, a move he considers unlikely.
The bank did highlight one potential bright spot: the growth of tokenized real-world assets, where Ethereum’s strong security could allow it to retain roughly 80% of that emerging market, possibly stabilizing or even reversing its decline in the long term.
Broader Expert Views and Market Trends
Standard Chartered’s bearish revision aligns with a wider cautious sentiment in the crypto market. The bank even forecasts Ether will continue lagging behind Bitcoin, projecting the ETH/BTC price ratio to sink to multi-year lows (around 0.015) by 2027.
This guarded outlook is echoed by other analysts. Researchers at asset manager VanEck recently wrote that Ethereum’s slide is “largely due to the erosion of the core factors that once made Ethereum valuable,” citing layer-2 networks (like Arbitrum and Base) siphoning away fee revenue and even rival chains such as Solana drawing users’ activity.
Technical traders are also wary – Aksel Kibar, a chartered market technician, has noted the lack of any clear bottoming pattern for ETH and likened trying to buy it now to “catching a falling knife.” Ethereum’s price is still down about 42% year-to-date, underscoring the challenges it faces.
Final Outlook
Standard Chartered’s revised stance suggests that, absent a significant change in network dynamics, Ethereum’s recovery will be limited. The bank expects some price rebound for ETH if the broader crypto market rallies, but maintains that Ethereum will underperform relative to its peers under current conditions.
