Main Points:
- Revised Target Price: Standard Chartered has drastically lowered its 2025 year-end target for Ethereum from $10,000 to $4,000, reflecting concerns over the asset’s structural decline.
- Layer 2 Competition: The rise of Layer 2 solutions—such as Coinbase’s Base—has significantly reduced Ethereum’s market capitalization by an estimated $50 billion, further eroding its competitive edge.
- Diminishing Advantages: Although Ethereum still maintains superiority on several metrics, its advantages are waning, posing long-term challenges for the network.
- Potential Recovery Factors: Standard Chartered notes that if the market for tokenized real-world assets (RWA) grows significantly, Ethereum’s security advantage might help maintain its market share.
- ETH/BTC Ratio Forecast: The ETH/BTC ratio is expected to fall to 0.015 by the end of 2027—the lowest since 2017—highlighting a relative decline versus Bitcoin.
- Outlook: Despite the current price of approximately $1,890, Ethereum is anticipated to recover from this level, yet its subdued performance is likely to persist in the near term.
1. Overview of the Revised Target
In a recently released research report, Standard Chartered has significantly revised its year-end target for Ethereum for 2025—from a previous projection of $10,000 to a more modest $4,000. Despite Ethereum’s current level being around $1,890 (as of March 18, 21:00 JST), the bank’s outlook suggests that the structural issues inherent in the Ethereum ecosystem will lead to a prolonged period of underperformance relative to other major assets.
2. The Impact of Layer 2 Solutions
A critical factor driving this downward adjustment is the increasing competition from Layer 2 blockchain solutions. In particular, platforms like Coinbase’s Base have begun to erode Ethereum’s dominance by reducing its overall market capitalization—Standard Chartered estimates a reduction of approximately $50 billion. This trend highlights a shift in the ecosystem where alternative solutions are siphoning off value and challenging Ethereum’s scalability and utility.
3. Waning Structural Advantages
While Ethereum continues to lead in several key metrics, its inherent advantages are diminishing over time. Standard Chartered’s report emphasizes that although the network remains robust in terms of security and decentralization, the momentum is waning. The potential for recovery exists, but the structural decline appears to be a significant hurdle that may keep Ethereum subdued compared to its former highs.
4. Recovery Prospects Tied to Tokenized Real-World Assets
The report also points out that there is a silver lining: if the market for tokenized real-world assets (RWA) experiences substantial growth, Ethereum’s security and established network could help it maintain a dominant share in this niche—potentially as high as 80% of the tokenized RWA market. However, Standard Chartered cautions that if the Ethereum Foundation adopts a more commercial approach by extracting fees from Layer 2 solutions, this advantage might be compromised. Nonetheless, such a shift is considered unlikely.
5. ETH/BTC Ratio Forecast
In addition to revising its price target, Standard Chartered forecasts that the ETH/BTC ratio will decline to 0.015 by the end of 2027. This would mark the lowest relative value since 2017, underscoring the anticipated underperformance of Ethereum compared to Bitcoin. This metric is a key indicator of the market’s shifting dynamics and investor sentiment.
6. Conclusion and Future Outlook
Standard Chartered’s dramatic downward revision of Ethereum’s year-end target from $10,000 to $4,000 reflects mounting concerns over the network’s structural challenges. The increasing competition from Layer 2 solutions like Coinbase’s Base, which has slashed Ethereum’s market cap by an estimated $50 billion, further erodes its position. While there is potential for recovery—especially if tokenized real-world assets take off—the forecasted decline in the ETH/BTC ratio to 0.015 by 2027 suggests that Ethereum will remain subdued relative to Bitcoin.
In the near term, Ethereum is expected to recover from its current level of approximately $1,890, but the broader challenges indicate that its growth may be more limited than previously anticipated. Investors and industry observers should be mindful of these structural headwinds as they assess Ethereum’s future in an increasingly competitive and evolving blockchain landscape.
