Ether (ETH-USD), the second largest cryptocurrency and the native currency of the Ethereum blockchain, could rise five times in value to $8,000 by the end of 2026, as per global bank Standard Chartered. Currently, Ether is trading just below $1,600. The bank’s bold projection is driven by expected improvements to the Ethereum blockchain.
Standard Chartered is Bullish on Ether’s Trajectory
The bank expects Ether to benefit from Ethereum’s growing use in smart contracts, gaming, and the “tokenization” of traditional assets. Currently, ETH is popular for non-fungible tokens (NFTs) and decentralized finance (DeFi).
The Ethereum blockchain is taking several initiatives to enhance its platform. One such initiative is danksharding, which will introduce some significant simplifications compared to previous designs and help Ethereum process 100,000 transactions per second. Proto-danksharding, a version of danksharding, is expected to be launched in early 2024. It could enhance the attractiveness of the platform by significantly lowering transaction costs.
Over the short-term, Standard Chartered expects Bitcoin (BTC-USD) halving in April 2024 to “lift all boats,” with Ether expected to hit $4,000 by the end of next year. Meanwhile, the bank provided a “structural” estimate range for Ether of $26,000 to $35,000 for a longer horizon. Geoff Kendrick, StanChart’s Head of FX Research (West) and Digital Assets Research, told Reuters that this structural estimate was for a “very long term, say 2040.”
“That valuation assumes future use cases and revenue streams that may not have emerged yet, although the real-world use cases of gaming and tokenization should support their development,” explained Kendrick.
Investors should note that estimating the valuation of cryptocurrencies is difficult as they are not backed by traditional assets. Additionally, they lack the factors that are used to assess the prices of stocks, bonds, or other assets. It is interesting to note that in July, Standard Chartered said that it expects Bitcoin, the largest cryptocurrency, to reach $50,000 this year and $120,000 by the end of next year. Bitcoin was trading at more than $26,700 as of writing.
Meanwhile, Ether has risen over 31% year-to-date but is still about 68% below its all-time high of $4,865.94, hit in November last year.
