Standard Chartered Bank has revised its 2025 Ethereum price forecast, cutting it from $10,000 to $4,000. Key reasons include a decline in market dominance and the impact of Layer 2 solutions on the Ethereum network.
Ethereum's Market Challenges
Ethereum has long been a leader in decentralized finance and Web3 applications, but the rise of Layer 2 networks has altered its economic structure. Geoff Kendrick's report, head of digital assets research at Standard Chartered, highlights the decline in Ethereum's network fee revenue, weakening its economic viability. Furthermore, Layer 2 networks like Coinbase's Base are capturing transaction fees that would traditionally go to Ethereum.
Prospects for Ethereum's Recovery
Despite the bearish outlook, Standard Chartered acknowledges that a market shift could lead to Ethereum's recovery. The growing adoption of tokenized real-world assets could bolster Ethereum's dominance; however, Kendrick believes this is unlikely without strategic changes.
Ethereum's Future: Challenges and Opportunities
Ethereum is set to introduce the Pectra upgrade on April 25, 2025, which aims to enhance staking procedures and introduce alternative gas fee payment options. However, experts remain skeptical that these updates will reverse Ethereum's ongoing market decline. With rising competition from cross-chain solutions and Layer 2 networks, Ethereum's future remains uncertain.
Ethereum continues to face rising competition from Layer 2 solutions and cross-chain networks. Analysts warn that Ethereum's price may remain under pressure unless significant changes occur within the ecosystem.
