Global bank Standard Chartered predicts that Ether (ETH), the second-largest cryptocurrency, could experience a more than five-fold increase in value by the end of 2026, reaching $8,000. This forecast is based on Ether’s growing use in blockchain-based smart contracts, gaming, and the tokenization of traditional assets. Geoff Kendrick, Head of FX Research, West, and Digital Assets Research at Standard Chartered, explained that this valuation assumes future use cases and revenue streams that may not have emerged yet, with real-world applications like gaming and tokenization supporting their development.
Kendrick stated, “We see the $8,000 level as a stepping stone to our long-term ‘structural’ valuation estimate of $26,000-$35,000,” emphasising that this long-term estimate is for the year 2040. Assessing the value of cryptocurrencies is challenging due to their lack of traditional asset backing, with their prices primarily driven by investor sentiment.
Standard Chartered’s confidence in Ether’s potential growth is rooted in the expected improvements to the Ethereum blockchain. Kendrick mentioned Ethereum’s plans to enhance performance through layer two scaling solutions and upcoming architecture improvements. For example, the implementation of “proto-danksharding” is anticipated to allow Ethereum to handle 100,000 transactions per second, significantly reducing transaction costs on the blockchain.
The bank believes that these enhancements will solidify Ethereum’s dominance in the smart contract space, leading to an increased price-to-earnings (P/E) ratio over the next couple of years. Kendrick also highlighted the growing demand for Ether as it finds new use cases, such as in non-fungible token (NFT) transactions and the development of blockchain gaming.
The report from Standard Chartered anticipates significant developments in the Ethereum network by 2025-26, showcasing proof of concept examples where real-world industries leverage Ethereum’s benefits. Additionally, Kendrick noted that positive regulatory developments, such as the approval of cryptocurrency spot exchange-traded funds (ETFs), could further benefit Ether.
The bank’s outlook on Ether aligns with its previous projections for Bitcoin (BTC), suggesting that the upcoming Bitcoin halving in April 2024 could positively impact both Bitcoin and Ether prices. Kendrick had earlier forecasted a target of $120,000 for Bitcoin by the end of 2024.
In conclusion, Standard Chartered’s forecast for Ether’s price growth is rooted in the cryptocurrency’s expanding use cases, improvements to the Ethereum blockchain, and the expected positive impact of broader market factors. The bank’s long-term structural valuation estimate indicates a bullish outlook for Ether’s value in the coming years.