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Standard Chartered just looked at Ethereum’s price, looked at Ethereum’s network activity, and essentially said: these two numbers don’t belong in the same universe.
The investment bank’s analysts argued in a Thursday note that ETH, currently trading around $2,000, is deeply undervalued relative to the volume of transactions flowing through its network and the billions parked in its DeFi ecosystem. Their fix for the math? A year-end target of $4,000 and a $40,000 price tag by the end of the decade.
The Amazon analogy
Standard Chartered drew a pointed comparison to Amazon during the dot-com bust. When the bubble popped in 2001, Jeff Bezos defended his company’s cratering stock by pointing to improving operational metrics. The bank sees a similar dynamic playing out with Ethereum: the price is going one direction while everything underneath is going the other.
And the numbers back up the disconnect. Ethereum processed over 200 million transactions in Q1 2026, a record for quarterly activity. Its DeFi total value locked sits between $43B and $45B, representing roughly 53% of all global DeFi liquidity. That’s not a network in decline. That’s a network doing more work than ever while its token trades at a 60% discount from its August 2025 peak of roughly $4,953.
Compare that to Bitcoin, which has dropped about 42% from its all-time high near $126,000 to roughly $72,800. Ethereum’s drawdown is significantly steeper, and Standard Chartered thinks the gap is unjustified.
The bank wrote that Ethereum’s price has “significant scope” to “catch up to internal metrics.” In English: the market is mispricing ETH, and the analysts believe the correction upward could be dramatic.
Why DeFi and stablecoins matter here
The core thesis isn’t complicated. Ethereum dominates two of the fastest-growing sectors in crypto: stablecoins and tokenized real-world assets. Standard Chartered’s analysts argue that as Wall Street continues migrating onto digital-asset rails, Ethereum is the infrastructure that benefits most.
The wider stablecoin market currently sits at around $320B in total capitalization, and Ethereum hosts a significant share of that. Tokenized real-world assets, meanwhile, are projected to reach $4-5 trillion by 2030. If even a fraction of that activity flows through Ethereum, the demand for ETH as gas and collateral grows substantially.
Here’s the thing. Ethereum isn’t just hosting DeFi. It’s hosting the majority of DeFi. With 53% of global liquidity locked on its network, no competitor is remotely close to challenging its position as the default settlement layer for decentralized finance.
That dominance creates a compounding advantage. Developers build where the liquidity is. Liquidity stays where the developers build. Breaking that loop is extraordinarily difficult, which is partly why Standard Chartered is willing to slap a 20x price target on the token from current levels.
Supply dynamics add another layer to the argument. More than 36 million ETH, roughly 30% of total supply, is currently locked in staking contracts. That’s a massive chunk of tokens removed from the tradeable float. Combined with the deflationary pressure introduced by EIP-1559 and The Merge, the available supply of ETH is shrinking even as demand for network usage grows. Basic economics says that’s bullish.
The math behind $40K
Standard Chartered’s $40,000 target isn’t pulled from thin air. It’s built on an assumption about the ETH/BTC ratio.
The bank expects that ratio to return to 0.08, a level last seen during the 2021 crypto boom. If Bitcoin reaches $500,000 by the end of the decade, which aligns with some of the more aggressive institutional forecasts, an ETH/BTC ratio of 0.08 implies an Ethereum price of $40,000.
That’s a big “if,” obviously. Bitcoin at $500K requires sustained institutional demand, favorable regulation, and continued adoption as a store of value. Ethereum at 0.08 ratio requires the market to re-evaluate ETH’s role as something more than just Bitcoin’s smaller sibling.
The near-term target of $4,000 by year-end is more digestible. It represents roughly a 2x move from current prices and would bring ETH back near its previous all-time high. Given that Ethereum’s on-chain metrics are stronger now than they were at the 2025 peak, the analysts see it as a reasonable recalibration rather than a moonshot.
Look, a 20x call on any asset is inherently aggressive. But Standard Chartered isn’t some anonymous account on Twitter. It’s one of the oldest multinational banks in the world, with a market presence spanning more than 50 countries. When its research desk publishes a note calling ETH fundamentally undervalued, portfolio managers pay attention, even if they don’t immediately act on it.
What investors should watch
The bull case is compelling but not without risks. Regulatory uncertainty remains a genuine headwind, particularly around stablecoin management in both the EU and the US. If regulators decide to impose restrictions that push stablecoin issuance away from public blockchains, Ethereum’s dominance in that sector becomes less valuable.
DeFi exploits are another concern. The sector has lost billions to hacks and smart contract vulnerabilities over the years. A major exploit on Ethereum’s network could dent confidence and pull liquidity elsewhere, at least temporarily.
There’s also the competition question. Layer-2 networks built on top of Ethereum have been siphoning transaction fees away from the mainnet. While these networks ultimately settle on Ethereum and use ETH as their base asset, the value accrual dynamics are still being debated. Some argue that Layer-2s dilute ETH’s fee revenue. Others say they expand the overall pie. Standard Chartered clearly falls in the latter camp.
For investors weighing the opportunity, the key metric to track is that ETH/BTC ratio. It currently sits well below the 0.08 level the bank is targeting, and a sustained move higher would signal the market is beginning to re-rate Ethereum relative to Bitcoin. If the ratio stays flat or continues declining, the $40,000 thesis becomes much harder to defend regardless of how many transactions Ethereum processes.
The staking percentage is worth monitoring too. With 30% of supply already locked, any meaningful increase further constrains the float and amplifies price moves in both directions. That’s a double-edged sword: great on the way up, brutal on the way down.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.
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