Standard Chartered Less Bullish on Ethereum
Standard Chartered, a British-based multinational Bank, released revisions to Ethereum’s price forecast. The firm reduced its Ethereum price target by 60%, citing the digital asset’s waning dominance in several industries and heightened competition from layer 2 blockchains.
The altcoin forecast was reduced from the initial estimate of $10,000 for the end of 2025 to $4,000. According to the bank, the Dencun upgrade in March 2024 marked a turning point for Ethereum.
The Dencun upgrade resulted in lower fees and higher net issuance, thereby helping Ethereum hold onto market share. However, data on blockchain “GDP” shows that not only have Ethereum’s fees dropped but layer 2 solutions especially Base, reduced its share of blockchain activity
According to the British-based Bank, Ethereum’s market valuation dropped by $50 billion because of GDP losses to Base, and it predicts further declines as Base establishes itself as a dominant layer 2 platform.
Ethereum’s fees-to-GDP ratio has decreased to a level comparable to Base and the OP Mainnet. Geoff Kendrick, Global Head of Digital Assets Research at StanChart, stated that Ethereum has effectively commodified itself within its own layer 2 framework.
Furthermore, Kendrick pointed out that although Ethereum’s security leadership might enable it to hold onto an 80 percent market share for tokenized real-world assets, this possibility is no longer enough to sustain a favorable medium-term outlook.
“We believe that the Ethereum Foundation could only accomplish this by taking proactive steps to change its commercial direction, like taxing layer 2s. We don’t think this is possible,” he added.
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