Ethereum could hit $8,000 by 2026, according to Standard Chartered

73
2
Ethereum could hit $8,000 by 2026, according to Standard Chartered

By improving efficiency and boosted demand, the world's second largest cryptocurrency, Standard Chartered said in a note on Wednesday.

By the end of 2026, ether could reach $8,000, or a 400% jump from today's price of around $1,600.

Geoff Kendrick, head of Digital Assets Research at FX Research, West, and Digital Assets Research, wrote.

That's only a'stepping stone' to a larger long-term valuation of $26,000-$35,000, though this estimate assumes use cases and revenue streams that have not yet come about, the note said.

The forecast partially stems from expected improvements to the Ethereum blockchain.

The block is aiming to enhance its performance by utilizing layer two scaling solutions and upcoming architecture advancements. Bitcoinsharding, for example, would allow Ethereum to manage 100,000 transactions per second.

Proto-danksharding, an alternative version of this, is to be introduced in early 2024 and would significantly lower transaction costs on the blockchain.

With its dominance in the smart contract space, Kendrick said, its P/E ratio will increase over the next couple of years.

The demand for ether will continue to increase as it finds new uses, while trends that depend on the cryptocurrency are set to expand.

NFT transactions are the top-of-the-line Ethereum use case, which Kendrick anticipates will expand in the near future. While he acknowledges that the NFT market activity has faded, digital art prices generally follow broader crypto price flows - with the 'crypto winter' coming to an end, NFTs should recover as well.

Blockchain gaming will fuel NFT demand, leading to ether growth. NFTs create a scarcity in these types of games, representing virtual assets like items or real estate.

Blockchain tokenization, where ownership rights are reflected in blockchain tokens, would be a boon for ether that is set to grow.

Kendrick wrote, and he did so with an emotional tone.

Tokenization provides for around-the-clock trading, immediate settlement, ownership transparency, better investor access, and lower expenses.

Inflows into bitcoin, which Kendrick has previously predicted to hit $120,000 by end-2024, would likely spill over into ether, while the upcoming bitcoin halving next year would put upside pressure on crypto in general.

However, positive regulatory developments, such as the creation of crypto spot ETFs, would also benefit ether.

The end of bond market sell-off has led to a significant boost in both Bitcoin and ether, which has resulted in higher bond yields.