- StanChart’s Geoffrey Kendrick projected that Base has clawed $50B from ETH’s market cap.
- Amberdata believed ETH could offer more shorting gains in the near term.
Standard Chartered (StanChart) has massively downgraded its Ethereum [ETH] price target for 2025 from $10K to $4K, a 60% slash.
According to a report by The Block, StanChart’s Head of Digital Assets Research, Geoffrey Kendrick, singled out Coinbase’s Base as one short-term risk factor.
Kendrick noted,
“Layer 2s, and Base in particular, now extract super-profits from the Ethereum ecosystem…We estimate that Base (the dominant Layer 2) has removed $50 billion of market cap from Ethereum alone.”
The analyst added that L2s now dominate transaction fees and bypass the mainnet. To solve this, he recommended Ethereum slapping a ‘super tax’ on L2s, or else the ETH/BTC ratio would dip lower.
Market reactions: What’s next for ETH?
Kendrick also highlighted that the past Ethereum changes, including ‘The Merge’ and ‘Dencun’ upgrades, were necessary for long-term scalability but have been ‘value destructive.’
Reacting to the report, Solana’s Co-Founder Anatoly Yakavenko termed it ‘spicy.’
When asked whether a similar ‘Base scenario’ on Solana would drag SOL to single digit value, Yakavenko downplayed it, citing Ethereum’s weak ‘alignment.’
Source: X
For his part, Ceteris, pseudonymous Head of Research at Delphi Research, jibed that StanChart’s $4K target was relatively higher.
“Standard Chartered is notorious for having ridiculously unrealistic price targets, they’re always way too high.”
That said, the ETH/BTC ratio, which tracks ETH price performance relative to BTC, marked a new 5-year low of 0.22 and was down 73% from its 2022 highs. Simply put, ETH has underperformed BTC for 5 years.
Source: ETH/BTC, TradingView
In fact, compared to the S&P 500 Index, SPX, ETH has underperformed U.S. equities since 2018, noted Quinn Thompson, Founder of Lekker Capital, a macro-focused crypto VC.
At the start of this cycle, ETH jumped 167%, rallying from $1600 to $4K between late 2023 and early 2024. However, as of this writing, the altcoin was valued at $1.9K and was on course to erasing all this cycle gains if it dipped lower.
According to Amberdata’s Greg Magadini, ETH could still offer more shorting opportunities, citing altcoins’ sell-off and ETH/BTC decline. He said,
“ETH remains the most interesting short-trade. The strong ETH/BTC ratio and the overall altcoin sell-off seem like strong trends that will continue to drag ETH much lower.”
Source: ETH/USDT, TradingView
From a price action perspective, ETH broke below its 5-year trendline support, further reinforcing the weak market structure stated by Magadini.
Whether short sellers will drag it to $1.6K or $1.2K remains to be seen.
