Standard Chartered Cuts Ethereum 2025 Forecast 60% to $4,000

Standard Chartered has made a significant adjustment to its price forecast for Ethereum (ETH) by the end of 2025, lowering its estimate from $10,000 to $4,000. This revision represents a 60% decrease from the previous projection. The bank attributes this downward revision to several structural challenges within the Ethereum ecosystem. Geoff Kendrick, the global head of Digital Assets Research at Standard Chartered, identified several key factors contributing to this decline. These include the impact of layer 2 blockchains, which were designed to enhance Ethereum's scalability but have instead led to a reduction in its market capitalization. Specifically, Kendrick noted that Base, a key layer 2 blockchain, has removed approximately $50 billion from Ethereum's market cap. Additionally, lower ETH fees, higher net issuance, and the diversion of Ethereum's fee revenue to layer 2 blockchains have all played a role in this structural decline. Kendrick emphasized that Base, developed to address scalability issues on Ethereum, is passing all its profit to Coinbase, its corporate owner, further exacerbating the situation. This shift in Ethereum's fee revenue has led to a significant reduction in the cryptocurrency's overall value.

The bank's revised forecast underscores the challenges facing Ethereum as it navigates the evolving landscape of blockchain technology and digital assets. Despite its dominant position in the Web3 and DeFi sectors, Ethereum's price prospects remain uncertain in the short term. Analysts have warned against assuming that Ethereum's price trades at a discount simply based on its deviation from average trading prices. The current chart does not show any bottoming formation, leading some analysts to compare trading Ethereum to "catching a falling knife." This cautious outlook is shared by other analysts, including Matthew Sigel and Patrick Bush from VanEck, who also cited the erosion of core factors that once made Ethereum valuable. The decline in Ethereum's fee revenue, driven by the popularity of layer 2 blockchains and memecoin trading on other blockchains, has further contributed to the pessimistic view.

The revised forecast by Standard Chartered reflects the broader sentiment among analysts regarding Ethereum's near-term price prospects. The bank's detailed analysis highlights the complex interplay of factors affecting Ethereum's value and underscores the need for continued innovation and adaptation within the Ethereum ecosystem. The bank's revision comes as Ethereum's price has already fallen more than 52% from its December 2024 high of $4,107. Data from TradingView shows ETH down 42% since the start of 2025. Despite being one of the largest cryptocurrencies by market capitalization and holding the dominant spot as the leader in Web3 and DeFi, many analysts believe that ETH’s price prospects remain grim in the short term.