Standard Chartered's Geoff Kendrick argues that Strategy's $2.5 million Bitcoin sale on Monday marked a turning point for Ethereum, according to analysis published Tuesday. The liquidation triggered one of Ethereum's largest daily outperformance spikes against Bitcoin since 2024, creating favorable conditions that could persist. Ethereum has lagged Bitcoin for months, but the bank's head of digital asset research contends the second-largest digital asset by market cap is positioned to narrow the gap as investor sentiment shifts.
Strategy's Bitcoin Sale Triggers Ethereum Outperformance Spike
After Strategy disclosed it had sold Bitcoin on Monday, Ethereum notched one of its largest price moves against Bitcoin in years, Kendrick wrote in Tuesday's note. Since the start of 2024, Ethereum has registered better daily gains relative to Bitcoin when it falls just 23 times, he added. The reaction to Strategy's liquidation created favorable conditions for Ethereum that investors' response suggests could persist, according to the Standard Chartered analysis.
Kendrick Projects ETH/BTC Ratio Reaching 0.04 by Year-End
By year's end, Kendrick argues that Bitcoin's dominance over Ethereum will weaken to levels not seen since September, reaching an ETH/BTC ratio of 0.04. Assuming Bitcoin remains unchanged at $67,300, Ethereum would rise 41% to roughly $2,700 from $1,900 under this scenario. The ETH/BTC ratio peaked last year in August at 0.042 as Ethereum hit an all-time high of nearly $5,000, but the asset has trended relatively lower since 2022.
Last week, Standard Chartered projected a year-end target of $4,000 for Ethereum. Kendrick has penciled in $40,000 for Ethereum by the end of the decade, while he expects Bitcoin to rise to $500,000 over the same period.
Ethereum Staking Model Reduces Sale Pressure Versus Bitcoin
Kendrick noted that Strategy's sale highlighted a distinct business model between Ethereum-buying and Bitcoin-buying firms. Companies can stake Ethereum to earn rewards by participating in the process of validating transactions, effectively generating revenue. Compared to Bitcoin-buying firms, that reduces the need for any sales, Kendrick wrote.
Ethereum Price Disconnected from Network Metrics
Standard Chartered contends that Ethereum's price doesn't reflect improving internal metrics. Kendrick compared the disparity to Amazon's tumble amid the catastrophic end to the dot-com bubble. The bank argues that the digital asset's current price is deeply disconnected from thriving network metrics.
Wall Street Interest in Stablecoins and Tokenization Benefits Ethereum
Kendrick wrote that Ethereum is poised to benefit from Wall Street's growing interest in stablecoins as modern money and tokenization as new market plumbing. Ethereum's grip in those sectors had been recognized by asset managers such as BlackRock. The asset created around the concept of smart contracts holds the code to power everything from tokens to decentralized apps and NFT projects.
FAQ
What did Strategy's Bitcoin sale on Monday trigger for Ethereum?
Strategy's $2.5 million Bitcoin liquidation on Monday triggered one of Ethereum's largest daily outperformance spikes against Bitcoin since 2024, according to Standard Chartered's Geoff Kendrick in analysis published Tuesday.
What is Standard Chartered's year-end price target for Ethereum?
Standard Chartered projected a year-end target of $4,000 for Ethereum last week. Kendrick argues that by year's end, assuming Bitcoin remains at $67,300, Ethereum would rise 41% to roughly $2,700 from $1,900 as the ETH/BTC ratio reaches 0.04.
How does Ethereum's business model differ from Bitcoin for corporate buyers?
Companies can stake Ethereum to earn rewards by participating in transaction validation, effectively generating revenue. Compared to Bitcoin-buying firms, this staking capability reduces the need for any sales, according to Kendrick's analysis.
