As the cryptocurrency market grapples with shifting dynamics in March 2025, Standard Chartered has made a striking adjustment to its year-end price target for Ether (ETH), the native token of the Ethereum blockchain. On March 17, 2025, the bank slashed its forecast from $10,000 to $4,000—a 60% reduction—citing structural challenges within the Ethereum ecosystem. This revision, detailed in a research report led by Geoff Kendrick, head of digital assets research, reflects a growing recognition of competitive pressures and market shifts impacting Ether’s valuation. The updated target suggests a tempered outlook amid a broader crypto downturn.
From Optimism to Caution
Standard Chartered’s initial $10,000 prediction, made in January 2025, was rooted in optimism about Ethereum’s growth potential under a pro-crypto U.S. administration following Donald Trump’s election victory in November 2024. At the time, the bank anticipated Ether would ride a wave of institutional adoption and regulatory clarity, bolstered by its role in decentralized finance (DeFi) and tokenization. Earlier forecasts from 2024 had been even more bullish, projecting Ether could hit $8,000 by year-end 2024 with spot ETF approval and climb to $14,000 by 2025 if Bitcoin reached $200,000, based on an ETH/BTC ratio of 7%.
However, the latest report paints a different picture. Ether has underperformed significantly, dropping 42% year-to-date and trading 60% below its all-time high of $4,878 from November 2021. Kendrick noted on March 17, “Ethereum is facing increasing competition from layer 2 solutions, prominently Base,” which has siphoned economic value from the mainnet.
Layer 2 Impact and Structural Decline
The bank’s revised forecast hinges on the rise of layer 2 (L2) blockchains, designed to enhance Ethereum’s scalability by processing transactions off-chain. Coinbase’s Base network, in particular, has been singled out as a key contributor, reducing Ether’s market capitalization by an estimated $50 billion. While L2s like Base lower transaction fees and congestion—benefits showcased by Ethereum’s Dencun upgrade in 2024—they also divert revenue away from the main network, channeling profits to entities like Coinbase rather than Ethereum itself.
This structural decline is evident in Ethereum’s “blockchain GDP,” a metric Kendrick uses to measure economic activity. The report indicates that a growing share of value generation is occurring on L2s, weakening Ethereum’s dominance despite its lead in metrics like total value locked (TVL). Citi analysts noted on March 15, 2025, that while TVL on Ethereum is rising, Ether’s price has not kept pace, underscoring this disconnect. The bank predicts the ETH/BTC ratio could fall to 0.015 by year-end 2027—its lowest since 2017—highlighting Ether’s relative underperformance against Bitcoin, which Standard Chartered sees hitting $500,000 by 2028.
Market Context and Sentiment
Ether’s current price of $1,900, up slightly in the last 24 hours as of March 17, reflects a challenging year. The asset has lost 35.77% against Bitcoin in 2025 and 13.43% in March alone. This contrasts with Bitcoin’s resilience, buoyed by institutional inflows and a proposed U.S. strategic reserve, pushing its price to $84,000 after a peak above $109,000.
Despite the bearish outlook, Standard Chartered sees a potential recovery from current levels, driven by a Bitcoin-led rally lifting all digital assets. The $4,000 target implies a 110% increase from $1,900, a modest gain compared to earlier projections but still significant. The bank also highlights tokenization of real-world assets (RWAs) as a growth driver, estimating Ethereum could retain an 80% share in this sector due to its robust security framework.
Ethereum’s Response and Future Upgrades
Ethereum’s recent upgrades, including the 2022 proof-of-stake transition and 2024’s Dencun update, aimed to bolster scalability but have inadvertently fueled L2 growth at the mainnet’s expense. The upcoming Pectra upgrade, set for April 2025, will introduce features like EIP-7702 and EIP-7251 to enhance validator participation and network performance. However, Kendrick doubts these will reverse the trend without a “proactive change of commercial direction” from the Ethereum Foundation, such as taxing L2s—a move he considers unlikely.
Analysts remain divided. Some X users, dismissed the forecast as overly pessimistic, arguing, “BTC to 500K is typical lies and BS from the cult maxis,” while others see it as a realistic adjustment. Standard Chartered’s report acknowledges Ethereum’s strengths—its pioneering role in smart contracts and DeFi—but warns that without strategic shifts, its market position may continue to erode.
Investor Implications
For Ethereum holders, this revision is a sobering update. The crypto market’s volatility, coupled with Ether’s struggles, suggests a cautious approach. While the $4,000 target offers hope for gains, it’s a far cry from the heady $10,000 prediction that fueled optimism earlier this year. Investors must weigh Ethereum’s fundamentals against competitive pressures, especially as Bitcoin’s dominance grows.
The contrast with Standard Chartered’s bullish Bitcoin outlook—$200,000 by year-end 2025 and $500,000 by 2028—underscores a shifting narrative. Ether’s journey, once a beacon of altcoin potential, now faces a midlife crisis, as Kendrick termed it. Whether this is a temporary setback or a longer-term trend remains to be seen, but the bank’s analysis offers a grounded perspective on a complex market.
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