Standard Chartered, one of the leading international banks, revised its prediction for Ethereum (ETH). Even with a bull market, ETH may end the year at $4,000 at most, down from a previous prediction of $10K.Â
The international bank Standard Chartered revised its prediction for Ethereum (ETH) downward. Previously, the bank was extremely bullish on Bitcoin (BTC) and even committed to offering more crypto services in the Euro Area.Â
When it comes to ETH, Standard Chartered reflected the bearish market sentiment. The bank revised its price prediction to $4,000 by the end of 2025, down from a previous expectation of $10,000. Standard Chartered analyst Geoffrey Kendrick predicted an even worse performance against BTC. ETH, currently under 0.023 BTC, is expected to drop as low as 0.015 BTC despite any growth in the nominal price.Â
Standard Chartered’s prediction is made in case Ethereum does not change its fee and scaling structure.Â
ETH traded at $1,905.09, but there is still a long way to go even to recover the $4,000 level. ETH sentiment remains volatile, with some expectations of a recovery. However, most traders remain cautious, and short-term sentiment quickly switches to bearish.Â
The short-term expectation is for ETH to revisit lower ranges, with the most extreme expectations for a return to three-digit prices. The new prediction arrives at a time when ETH is on track to end the first quarter in the red. ETH may close three consecutive months in the red, an unprecedented market move. In February alone, ETH erased over 32% of its market price following a series of liquidations for all assets.
ETH’s price weakness brought back expectations of a short squeeze. However, those predictions have been made for ETH multiple times without materializing. ETH’s open interest has remained under $10B for a few weeks now. There are some signs of accumulation as whales try to lower their average acquisition price but with few expectations of another season of innovation and new narratives using Ethereum as their main chain.
L2 decreased Ethereum’s on-chain GDP
The prediction by Standard Chartered was mostly linked to on-chain factors besides market sentiment. The bank noted that the Dencun upgrade brought a shift in the usage of Ethereum. Most of the chain’s activity switched to Base, which appealed more to end users.Â
The bank’s analysts noted this removed Ethereum’s earnings. Currently, earnings for the Ethereum ecosystem mostly come from the block reward, with a smaller share of fees. The Dencun upgrade itself lowered the fees owed to Ethereum, leaving most L2 to retain all their earnings.Â
At the same time, Ethereum usage fell or was limited to several high-liquidity trading pairs on decentralized markets. Innovation and new types of assets moved to other chains, as ETH gas fees remained a problem. The L2 chains took some of the extra traffic, but the L1 is still comparatively slow and incompatible with new use cases.Â
Additionally, Ethereum inflation is predicted to produce 940K ETH a year, currently standing at 0.73%. The additional coins, along with older whales, active traders, or unstaked tokens, will increase selling pressure.Â
Even with record low gas prices under 1 GWEI again, Ethereum is lagging behind BNB Smart Chain and Solana in terms of on-chain decentralized activity. Tether (USDT) remains the main use case for the Ethereum network, which still carries over 57% of the stablecoin’s supply.
Ethereum only produces $5.11M in fees weekly, lagging behind Solana and BNB Smart Chain. At the same time, the network has to pay over $172M in monthly revenues to validators while still promising 2.98% in annualized gains. The chain has become less efficient in generating revenues based on its general expenses and has lost the narrative of being ultrasound money with increasing scarcity.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear 