Standard Chartered Adjusts ethereum Price Target Due to Layer 2 Challenges
Standard Chartered has revised its 2025 price target for Ethereum from $10,000 to $4,000. The bank cites structural issues within the Ethereum ecosystem as the reason for this change.
Analysts at Standard Chartered believe Layer 2 solutions, such as Coinbase’s Base network, are partly responsible. These solutions aim to improve Ethereum’s scalability by lowering transaction fees and reducing network congestion. However, they may be siphoning revenue away from the main Ethereum network.
For example, Base directs its profits to Coinbase, which could reduce Ethereum’s market share. This shift has already led to an estimated $50 billion decrease in ethereum’s market capitalization.
The bank also predicts a decline in the ETH/BTC ratio,expecting it to reach 0.015 by 2027. this level hasn’t been seen since 2017, indicating Ethereum may underperform compared to Bitcoin in the coming years.
Despite these challenges, Ethereum remains a leader in decentralized finance, stablecoins, and tokenized assets. however, its dominance is waning. Standard Chartered suggests that without action from the Ethereum Foundation, such as taxing Layer 2 solutions, this trend may continue.
Ethereum’s price could still rise from its current level of about $1,900, especially if Bitcoin gains substantially. However, the bank warns that Ethereum’s relative underperformance may persist in the medium term.
