A top global bank, Standard Chartered, has drastically cut its Ethereum (ETH) price forecast for 2025, lowering it from $10,000 to just $4,000. The bank points to major issues in Ethereum’s ecosystem, especially Layer-2 networks like Base, which are pulling value away from Ethereum’s main network. This sharp downgrade comes as Ethereum struggles, with its price dropping heavily this year.
Ethereum Price Target Cut by 60%
At the start of the year, Standard Chartered was optimistic about Ethereum, predicting it could hit $10,000 by the end of 2025. Meanwhile, Standard Chartered Bank has dropped its Ethereum price target to just $4,000. Indeed, the move has seen the bank slash the projection by 60%, falling from its previous $10,000.
However, Ethereum’s performance has been weak, losing over 45% of its value this year alone. Compared to Bitcoin, ETH has dropped by 35% since January and 13% in March.
One of the key reasons for this underperformance is the rise of Layer-2 solutions. These networks, like Base, process many transactions that would have otherwise taken place on Ethereum’s main blockchain.
Standard Chartered argues that these Layer-2s are keeping a large portion of the transaction fees without giving back much to Ethereum’s ecosystem. This shift has caused a decline in Ethereum’s economic strength.
Possible Solutions for ETH’s Drop
Standard Chartered suggests that Ethereum could lose even more market share if no action is taken. One idea is to introduce a tax on Layer-2 networks that retain too much profit without reinvesting in Ethereum’s ecosystem.
This would be similar to how some countries tax foreign companies that extract resources without benefiting the local economy.
The bank also predicts that Ethereum’s value compared to Bitcoin will continue to decline, with the ETH/BTC ratio possibly dropping to 0.015 by 2027. If this happens, it would be Ethereum’s lowest standing against Bitcoin since 2017.
Can Ethereum Recover?
While Ethereum is facing challenges, it still has a strong position in the crypto market. As of now, ETH price is trading around $1910 reflecting a drop of almost 5% in a week with a market cap hitting $230 billion.
