When the dot-com bubble burst in 2001, Amazon CEO Jeff Bezos defended the company’s ailing stock price, contrasting its fall against improving metrics. Recently, that disparity has been reflected in Ethereum’s underperformance, according to Standard Chartered.
The investment bank’s analysts argued in a Thursday note that Ethereum’s current price doesn’t reflect an increasing number of transactions that take place on the asset’s network, nor the value of digital assets deposited into decentralized finance (DeFi) applications.
The second-largest cryptocurrency by market cap meanwhile changed hands at $2,000, a 60% decline from August's peak price of nearly $5,000. The analysts noted that Bitcoin, compared to its October all-time high of $126,000, has plunged just 42% to roughly $72,800.
Standard Chartered believes that Ethereum's price has "significant scope” to “catch up to internal metrics,” given that the asset’s native network is expected to benefit from Wall Street’s steady migration onto digital-asset rails. Ethereum already dominates the market for stablecoins and tokenization, they said—sectors that are set to see surging growth.
The analysts reiterated their year-end price target of $4,000 for Ethereum, while also penciling in $40,000 for the end of the decade. They said the moves would bring the price ratio between Ethereum and Bitcoin back to 0.08, a level not seen since the crypto market boom of 2021. (Bitcoin would be worth $500,000 at that point.)
The 94% drawdown for Amazon shares was stark when rampant speculation in early internet startups turned into a mass investor exodus decades ago. “While the stock price was going the wrong way, everything inside the company was going the right way,” Bezos said.
“We see parallels with the ETH price today, and we reaffirm our strongly bullish ETH forecasts,” Standard Chartered said, underscoring stablecoins’ role in 33% of Ethereum transactions year-to-date. “We think that more activity in the ecosystem will drive ETH price gains.”
What’s more, the Ethereum Foundation has backed the creation of an “economic zone,” which is set to debut this summer, allowing digital assets to move more freely across various networks that are built on top of Ethereum. Enabling applications to seamlessly exchange data across networks will also boost activity, the analysts said.
There is a direct relationship between Ethereum’s supply and demand for activity on the network; however, that relationship has morphed over time.
Gas fees paid by users to move funds and interact with applications are burned, or removed from circulation, thereby increasing Ethereum’s scarcity and reducing its inflation rate. Namely, a network upgrade that debuted in 2024 introduced new ways for layer-2 scaling networks to save on associated costs, and as a result, transaction fees fell to historic lows.
Finally, Standard Chartered sees potential for DeFi activity on Ethereum to be legitimized for institutions through the passage of legislation that codifies standards. With digital assets representing real-world assets like commodities, stocks, and bonds set to move on-chain, they argued Ethereum is set to benefit from the network’s existing dominance.
“If RWAs multiply by 50x over the next few years as we expect, the importance of this sector to Ethereum is set to increase dramatically,” the analyst said. “As a result, we would expect transaction numbers and total value locked to continue to print all-time highs.”
Users on Myriad—a prediction market platform operated by Decrypt's parent company, Dastan—remain bearish in the short term about Ethereum's price prospects, giving the coin a 65% chance of next falling to $1,500 rather than rising to $3,000.
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