Standard Chartered has significantly adjusted its forecast for Ether’s price in 2025, now predicting it will reach only $4,000, down from an earlier target of $10,000.
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This sharp revision is largely due to the growing dominance of Ethereum’s Layer 2 solutions, with the Base network emerging as a key player in this shift. Geoffrey Kendrick, the bank’s head of digital assets research, explained that Base’s increasing market share has caused Ethereum to lose significant value, estimating that the Layer 2 network alone has removed around $50 billion from Ethereum’s market cap.
According to Kendrick, Ethereum has inadvertently “commoditized itself” by allowing Layer 2 solutions to take center stage. As more transaction fees bypass the Ethereum mainnet in favor of Layer 2, Ethereum’s foundational layer has seen a reduction in its profitability, creating what Kendrick calls “super-profits” for Layer 2 networks like Base. These networks, according to Kendrick, are reaping the benefits of Ethereum’s structure, extracting significant value while Ethereum itself faces diminishing returns.
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While Kendrick does suggest that one way to address this issue could be by taxing these Layer 2 platforms—much like governments tax foreign-owned mining companies extracting excess profits—he acknowledges that such a move is unlikely. Without such changes, he predicts that the relative value of Ethereum will continue to decrease in comparison to Bitcoin, further pushing down the ETH-BTC ratio.
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Currently, Ethereum is trading at around $1,900, a steep drop from its peak of $4,878 in November 2021. Despite the severe decline, Kendrick is not entirely pessimistic about Ethereum’s long-term potential. He still expects some recovery, forecasting a price of $7,500 by 2028-2029. However, he believes that unless Ethereum can redefine its fee structure or strengthen its market positioning, ETH will continue to lag behind BTC.
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Alexander Stefanov
