Standard Chartered Predicts Ethereum Could Reach $40,000 and Surpass Bitcoin

Summary:
Geoffrey Kendrick, the Global Head of Digital Assets Research at Standard Chartered, anticipates that Ethereum (ETH) could soar to $40,000 by 2030, potentially outperforming Bitcoin. He attributes this bullish outlook to the upcoming shifts in tokenization, the growth of stablecoins, and the increasing blockchain adoption by institutional players.

Key Takeaways:

Standard Chartered predicts Ethereum could reach $40,000 by 2030.
The firm believes Ethereum will be the go-to platform for traditional finance (TradFi) due to its reliability.
Kendrick emphasizes the potential growth of stablecoins and tokenized assets in driving demand for Ethereum.
Institutional liquidity may increasingly flow onto Ethereum as compliance concerns are addressed.

Ethereum Could Hit $40,000 And Beat Bitcoin, Standard Chartered Says

Ethereum's Potential to Outpace Bitcoin

In a conversation with John Gillen from Milk Road, Kendrick connected his optimistic stance on Ethereum directly to how traditional finance is evolving in relation to blockchain technology. He stressed that Ethereum is not just benefiting from market trends but is regarded as the most secure platform for banks, asset managers, and other large institutions to develop their blockchain infrastructure.

Supporting Evidence for Ethereum's Growth

Earlier this year, Kendrick published a report highlighting an expectation of Ethereum's outperformance against Bitcoin. In a recent interview, he recognized that while the price of ETH has faced challenges, its foundation remains strong. He remarked, “With the engagement of traditional finance (TradFi), there’s a clear indication that building on Ethereum is a safe choice, as it has proven to be reliable. Therefore, the first wave of activity is likely to take place on Ethereum’s primary network.”

Kendrick pointed to the strategy employed by BlackRock as a blueprint for institutional adoption, forecasting that many firms will initially use Ethereum’s mainnet before branching out to other blockchain networks and layer-2 solutions. He believes this sequential approach will have a significant impact on the network's activity and value.

He also mentioned looking at protocol and application fees relative to market capitalization as a helpful method for assessing Ethereum's value, suggesting that increased activity in the Ethereum ecosystem should lead to a higher price for ETH. He projected a possible rise in the ETH/BTC ratio (currently around 0.03) to 0.04 in the near future.

The Broader Implications of Tokenization

Kendrick emphasized that a major factor driving Ethereum's outlook is the imminent surge in tokenization. He projected that the market for stablecoins could grow from approximately $300 billion today to around $2 trillion in the coming years. This increase is expected to generate further demand for tokenized money market funds. Corporate treasurers are likely to seek on-chain solutions for all their assets, as moving illegally slowed traditional funds becomes less appealing.

“Imagine an immediate need for stablecoins,” Kendrick elaborated. “To fully leverage their benefits, firms will want to convert all their assets on-chain instead of reverting to slow-moving fiat currencies.”

Kendrick forecasts that tokenized money market funds, currently estimated at $10 billion, could balloon to $750 billion by the end of 2028. This prediction assumes that even a modest shift of 10% of transactions to stablecoins will necessitate a similar shift in money market fund assets to on-chain platforms.

He also expects other tokenized assets to grow from around $40 billion to $2 trillion by 2028, representing significant growth over three years.

Bridging Traditional Finance and DeFi

Kendrick believes that if regulatory clarity advances, traditional finance and decentralized finance (DeFi) might start to converge. This could result in blockchain-enabled consumer applications that direct funds into DeFi platforms like Aave or Compound. “This evolution could introduce financial fairness and inclusion, with consumers benefiting from innovative financial tools that operate behind the scenes,” he explained.

For Kendrick, the crux of the Ethereum investment narrative is the potential influx of institutional cash into tokenized dollars, funds, and equities. He views Ethereum as the initial platform where compliance teams feel most secure during this transition.

As of the latest report, Ethereum's price stands at $2,059.

Ethereum price chart
ETH remains in a macro uptrend, 1-month chart | Source: ETHUSDT on TradingView.com