Standard Chartered has adjusted its Ethereum year-end price target for 2025 to $4,000, citing structural challenges within the Ethereum ecosystem.
Ethereum Price Target Reduced
The bank’s analysts attribute the adjustment to the impact of Layer 2 solutions like Coinbase’s Base network, which has reduced Ethereum’s market capitalization by approximately $50 billion.
Impact of Base Network and Layer 2 Solutions
Layer 2 networks such as Base are aimed at enhancing Ethereum's scalability by reducing transaction fees and congestion. However, Base directs its profits to Coinbase, potentially diminishing Ethereum's market share.
Expected ETH/BTC Dynamics
The bank also forecasts a decline in the ETH/BTC ratio, predicting it will reach 0.015 by the end of 2027. This suggests Ethereum may underperform relative to Bitcoin in the coming years. Without proactive measures from the Ethereum Foundation, this decline in market dominance may persist.
Despite these challenges, Ethereum continues to lead in decentralized finance, stablecoins, and tokenized assets. However, without active initiatives by the Ethereum Foundation, its market share might continue to erode.
