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.
“The solution would be to tax Layer 2 super-profits in the same way governments sometimes charge super taxes for foreign-owned mining companies that extract excess profits. Unless that happens, ETH-BTC will keep going down,” he said.
That means Ethereum is expected to struggle compared to Bitcoin. Standard Chartered predicts the ETH-BTC ratio could drop to 0.015 by 2027, the lowest since early 2017.
Still, the bank believes Ethereum will go up in the long run. It predicts ETH will reach $5,000 in 2026, $6,000 in 2027, and $7,500 by 2028-2029. Ethereum still leads in decentralized finance (DeFi) and tokenized real-world assets (RWAs), holding a major share of both. Future upgrades like Pectra in 2025 might help, but for now, Ethereum’s future is uncertain.
Right now, Ether is currently trading at around $1,900. This is 60% down from its all-time high of approximately $4,878 in November 2021, according to CoinMarketCap.
Also Read: Strategy Buys 130 Bitcoin, Its Smallest Purchase Yet
