Standard Chartered forecasts Ethereum’s price will fall to $4,000 by 2025, down from $10,000, citing the rise of Layer-2 networks, like Coinbase’s Base, as detrimental to Ethereum’s market share and fees. Despite potential opportunities for growth through tokenized assets and the upcoming Pectra upgrade, analysts remain cautious about ETH’s future.
Analysts at Standard Chartered predict a continued “structural decline” in Ethereum’s price, revising their 2025 target from $10,000 to $4,000. Geoff Kendrick, the Global Head of Digital Assets Research, suggests that the Ethereum-to-Bitcoin ratio will progressively lag behind Bitcoin, even if Ethereum’s price increases.
The report attributes Ethereum’s declining dominance to the rise of Layer-2 networks, particularly Coinbase’s Base, which are reducing Ethereum’s market cap. Layer-2s enhance functionalities by operating off-chain, drawing fees away from the Ethereum Foundation and impacting gas fees.
Kendrick estimates that Base has stripped approximately $50 billion from Ethereum’s overall market cap due to transaction fee reallocation. This retraction decreases the network’s revenue, leading to an excess minting of new coins to cover expenses, thus impacting ETH’s market value.
He suggests that a strategic change from the Ethereum Foundation, like implementing a taxation mechanism on Layer-2 transactions, could help restore some market share, although he considers this scenario unlikely. Coinbase reportedly made around $24 million in profit from Base at the end of 2024.
Kendrick does highlight other potential pathways for Ethereum’s resurgence, such as the rise in popularity of tokenized real-world assets. Although he believes in Ethereum’s security qualities for these applications, he no longer views them as a solid foundation for his medium-term expectations.
In parallel, the Ethereum community is gearing up for the Pectra upgrade, touted as the most significant improvement since 2022’s “The Merge.” The update promises to enhance ETH staking limits and allow gas fee payments in various cryptocurrencies. Although testing has faced hurdles, its mainnet launch could occur as early as April 25, with a final testnet, named Hoodi, scheduled for this month.
As of the latest data, ETH has risen by 1.3% over the past 24 hours, yet it has plummeted 29.6% month-on-month and 46.7% since the start of the year.
