Standard Chartered Slashes Ethereum Price Target from $10K to $4K, Citing Layer 2 Challenges
In a surprising shift, Standard Chartered has significantly revised its year-end 2025 price target for Ethereum, dropping it from an optimistic $10,000 to a more conservative $4,000. This 60% reduction reflects growing concerns about structural hurdles within the Ethereum ecosystem, particularly the rising influence of Layer 2 solutions. The bank’s analysts point to networks like Coinbase’s Base as key factors reshaping Ethereum’s financial landscape, potentially at the expense of its core network.
The adjustment stems from an estimated $50 billion reduction in Ethereum’s market cap, a figure tied directly to the success of Layer 2 solutions. These networks, designed to address Ethereum’s scalability issues by lowering transaction fees and easing congestion, have undeniably improved user experience. However, Standard Chartered’s research suggests an unintended consequence. Platforms like Base, while boosting efficiency, appear to be siphoning revenue away from Ethereum’s main chain. Instead of bolstering the broader ecosystem, Base channels its profits to Coinbase, raising questions about Ethereum’s long-term market share.
Beyond the immediate price outlook, the bank forecasts a troubling trend for Ethereum’s standing relative to Bitcoin. Analysts predict the ETH/BTC ratio will slide to 0.015 by the end of 2027, a level last seen in 2017. This projection hints at a future where Ethereum struggles to keep pace with Bitcoin’s performance, a dynamic that could reshape investor perceptions of the two leading cryptocurrencies.
Ethereum’s Strengths Face Growing Pressure
Despite these challenges, Ethereum retains a commanding presence in critical sectors like decentralized finance, stablecoins, and tokenized assets. Its role as a foundational blockchain remains undisputed, yet Standard Chartered warns that its dominance is eroding. The bank suggests that without strategic interventions—such as the Ethereum Foundation imposing taxes on Layer 2 networks—this gradual decline could become a defining trend. The absence of such measures leaves Ethereum vulnerable to further revenue losses as Layer 2 solutions continue to proliferate.
Still, there’s a silver lining for Ethereum investors. With its current price hovering around $1,900, the bank acknowledges room for growth, particularly if Bitcoin surges in the coming months. A rising tide in the crypto market could lift Ethereum toward that $4,000 target by year-end. However, the bank tempers this optimism with a cautionary note. Ethereum’s relative underperformance compared to Bitcoin may persist, suggesting that while short-term gains are possible, its broader trajectory could face headwinds.
This revised forecast underscores a pivotal moment for Ethereum. As Layer 2 networks redefine the blockchain’s economics, the Ethereum Foundation and its community may need to adapt swiftly to preserve its competitive edge. For now, Standard Chartered’s outlook serves as a sobering reminder that even the most established players in crypto must navigate an ever-evolving landscape.