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Standard Chartered Cuts 2025 Ethereum Price Target to $4,000

Standard Chartered just slashed its Ethereum (ETH) price prediction for 2025. The bank now expects ETH to hit $4,000 instead of its earlier estimate of $10,000. This is a massive 60% cut.

According to the bank, Ethereum is losing a lot of money to Layer 2 networks like Base, which are taking a big chunk of its profits.

Geoffrey Kendrick, the bank’s global head of digital assets research, explained, “We estimate that Base (the dominant Layer 2) has removed $50 billion of market cap from Ethereum alone”

Ethereum built Layer 2 networks to make transactions cheaper and faster. But here’s the problem, these networks are making money while Ethereum itself is getting weaker.

Kendrick said that “Ethereum has essentially commoditized itself within its self-created Layer 2 framework”, meaning it’s lost a lot of its value because transaction fees are skipping the main network. Instead of strengthening Ethereum, these Layer 2s are taking away its profits, leaving Ethereum with less money to grow.

A big moment in all of this was the Dencun upgrade in March 2024. It was supposed to make Ethereum run better, but instead, it helped Layer 2s more than Ethereum itself. Kendrick explained, “Layer 2s result in (1) lower GDP on the Ethereum mainnet and (2) lower fees, at least in the near term”. In simple terms, Ethereum is making less money while Layer 2s are thriving.

However, one possible fix is if Ethereum could tax these Layer 2 networks, just like some governments tax mining companies that make too much profit. But Kendrick doesn’t think that will happen#WhaleMovements
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