Standard Chartered analysts argued in a recent note that Ethereum’s current price doesn’t reflect the increasing number of transactions taking place on the network, nor the value of digital assets deposited into decentralized finance (DeFi) applications.
Ethereum changed hands at around $2,000, a 60% decline from its peak price of nearly $5,000. The analysts noted that Bitcoin, compared to its all-time high of $126,000, has fallen just 42% to roughly $72,800.
The investment bank believes Ethereum’s price has “significant scope” to catch up to its internal metrics, given that the network is expected to benefit from Wall Street’s steady migration onto digital-asset infrastructure. Ethereum already dominates the market for stablecoins and tokenization — sectors set to see surging growth, they said.
The analysts drew a parallel to Amazon following the dot-com bubble burst, when CEO Jeff Bezos noted that improving company fundamentals stood in stark contrast to the stock’s steep decline. Standard Chartered applied similar reasoning to Ethereum’s current position, pointing to stablecoins accounting for 33% of Ethereum transactions year-to-date. “We think that more activity in the ecosystem will drive ETH price gains,” the bank said.
Standard Chartered reiterated a year-end price target of $4,000 for Ethereum, while also projecting $40,000 by the end of the decade. Those levels would bring the ETH-to-BTC price ratio back to 0.08, a level last seen during the 2021 crypto market boom — implying a Bitcoin price of $500,000 at that point.
The Ethereum Foundation has also backed the creation of an “economic zone” set to debut this summer, designed to allow digital assets to move more freely across networks built on top of Ethereum. Enabling applications to seamlessly exchange data across networks could further boost activity, the analysts said.
On the supply side, gas fees paid by users are burned — removed from circulation — which increases Ethereum’s scarcity and reduces its inflation rate. However, a 2024 network upgrade introduced new ways for layer-2 scaling networks to reduce costs, causing transaction fees to fall to historic lows, which has moderated that dynamic.
Finally, Standard Chartered sees potential for DeFi activity on Ethereum to gain institutional legitimacy through legislation that codifies standards for digital assets representing real-world assets such as commodities, stocks, and bonds.
Source: Standard Chartered Reaffirms $4K ETH Target, Cites DeFi Dominance