Standard Chartered Cuts Ethereum's Year-End Price Target to $4,000, Citing L2 Impact

Standard Chartered has revised its year-end price target for Ethereum (ETH) to $4,000, a significant drop from its previous forecast of $10,000. This adjustment, detailed in a research report released recently, cites structural weaknesses in Ethereum's economic model following its shift to proof-of-stake and the rise of Layer-2 (L2) networks. According to the report, the growth of L2 solutions like Base has diverted substantial value away from the main Ethereum blockchain, with Base alone estimated to have removed $50 billion in market capitalization from Ethereum's core ecosystem. The launch of the Dencun upgrade in March 2024 further empowered L2s by allowing them to capture a larger share of transaction fees. Standard Chartered suggests Ethereum consider a "super tax" on L2s to redirect economic value back to the main chain. The bank also cut its Ethereum-Bitcoin (ETH-BTC) forecast, predicting a decline to 0.015 by year-end. Despite these concerns, Standard Chartered maintains a long-term optimistic outlook, forecasting a recovery to $6,000 by 2026 and $7,500 by 2027.