Thomas Daniels
Ethereum Price Target Cut by Standard Chartered to $4,000, Citing Layer 2 Impact
Standard Chartered has drastically lowered its predicted price for Ethereum (ETH) from $10,000 to $4,000 in their 2025 year-end price projection. The bank ascribes this downward adjustment to the Ethereum ecosystem’s persistent structural issues, including the emergence of Layer 2 solutions like Coinbase’s Base network.
Layer 2 networks, which were intended to improve Ethereum’s scalability by lowering transaction costs and congestion, have unintentionally hurt the cryptocurrency’s financial standing, according to the bank’s analysts. Despite increasing network efficiency, these solutions are taking money away from the core Ethereum blockchain, which has a big effect on its market value.
Ethereum’s Market Share Is Being Reduced by Layer 2 Solutions
According to the article, Ethereum’s market valuation has dropped by an estimated $50 billion as a result of Base, a Layer 2 network created by Coinbase. Although Base and other Layer 2 solutions provide quicker and less expensive transactions, their business models sometimes send profits to centralized organizations instead than Ethereum.
Concerns regarding Ethereum’s long-term dominance in important industries like tokenized assets, stablecoins, and decentralized finance (DeFi) are raised by this change in economic incentives. Standard Chartered cautions that Ethereum’s competitive advantage might keep eroding in the absence of action from the Ethereum Foundation, such as imposing transaction charges on Layer 2 networks.
The ETH/BTC Ratio is anticipated to continue declining.
In addition to Ethereum’s price prediction, Standard Chartered projects a sharp drop in the ETH/BTC ratio, predicting that it will reach a level not seen since 2017 by the end of 2027: 0.015. According to this forecast, Ethereum might continue to perform poorly in comparison to Bitcoin (BTC) during the ensuing years, which would further encourage investor prudence.
Ethereum’s Prospects for Growth vs Structural Obstacles
The bank admits that Ethereum’s price may still rise from its present level of about $1,900 in spite of these worries, especially if Bitcoin sees significant gains. However, Ethereum’s long-term valuation may be threatened by its relative underperformance as well as the growing dominance of Layer 2 solutions.
Investors will be keenly monitoring Ethereum as it navigates these structural changes to determine if the network can adjust to maintain its market leadership.
