- 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.’
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.
