Standard Chartered Warns Of Ethereum’s Declining Dominance

The forecasts of major financial institutions are often closely scrutinized by investors. Indeed, when a renowned bank like Standard Chartered drastically lowers its price target for Ethereum (ETH), the news does not go unnoticed. From a marked optimism of $10,000 for 2025, the bank downgrades its estimate to $4,000, representing a reduction of more than half of its previous anticipation.

The pressure from Layer 2 solutions weighs on Ethereum

Standard Chartered justifies its change in direction by the rise of Layer 2 solutions, these infrastructures built on Ethereum that aim to improve scalability and efficiency of transactions.

Among them, Base, developed by Coinbase, captures an increasing share of transaction volume. This success, far from being a boon for Ethereum, weakens the native demand for ETH, the base asset necessary for paying fees on the main blockchain.

In its report shared in a message on the X social network (formerly Twitter) on March 17, 2025, LWS Financial Research highlights that:

“ETH is losing its central role as Layer 2s establish themselves as viable alternatives”.

Unless there is a specific taxation on these solutions to restore a balance (an eventuality deemed unlikely), Ethereum could continue to see its dominance erode.

Here are the main points highlighted by Standard Chartered to explain this revision of forecasts:

• The rise of Layer 2: these solutions offer faster and cheaper transactions, limiting the direct use of Ethereum ;
• The decline in demand for ETH : users are increasingly interacting with these secondary layers without needing to buy or hold as much ETH ;
• A lack of compensatory measures : the introduction of a tax on these Layer 2 solutions could help rebalance demand, but Standard Chartered considers this scenario unlikely.

A price that could still double

Despite the downward revision, Standard Chartered still believes that ETH could more than double its current value.

Trading at $1,911 after a 5 % drop over the week, Ethereum could reach $4,000 this year, which would still offer significant upside potential. However, this bullish trajectory now relies on factors that are less structural than before, which could deter some investors in search of certainties.

A continuous drop since the beginning of the year

If ETH/USD retains a rebound potential, the ETH/BTC pair, meanwhile, is collapsing. Since January, ETH has lost 36 % against BTC, reaching 0.023 BTC, its lowest level since 2017.

A spectacular decline, considering that ETH had climbed to 0.088 BTC in 2021, during the NFT and DeFi frenzy.

“Ethereum’s inability to find a new bullish momentum against Bitcoin limits its appeal among institutional investors,” the report highlights.

Meanwhile, Standard Chartered maintains an ultra-bullish view on Bitcoin, projecting a surge to $200,000 this year, and a target of $500,000 in the long term.

This prediction reinforces the perceived imbalance between BTC and ETH, and could continue to amplify the capital flow toward the number 1 crypto in the market.

Ethereum is going through a pivotal period, where its attractiveness is being tested against growing internal competition and a Bitcoin stronger than ever. Yet, the network still has solid cartridges left, particularly thanks to Ethereum 2.0, which promises better scalability and reduced fees. If innovation follows, Ethereum could regain its momentum. But without a new strong catalyst, the current pressure on its price is likely to intensify.