Standard Chartered (STAN +0.38%) global head of digital assets research, Geoff Kendrick, says he believes Ethereum (ETH +0.22%) could reach $25,000 by 2028. That's a 505% increase from the closing price of $4,128 on Oct. 14. Kendrick, who is known for his bullish predictions, also thinks Ethereum could reach $7,500 by the end of this year.
Kendrick identified two major drivers that could propel Ethereum to new highs. One is heavy corporate and institutional accumulation. The other is the growth of the stablecoin and decentralized finance industry, much of which gets built on Ethereum's ecosystem.
Ethereum's path to $25,000
Cryptocurrency has taken some huge strides toward mainstream adoption this year, and that's been particularly good for Bitcoin (BTC +0.26%) and Ethereum, the two most dominant cryptocurrencies. Buoyed by a pro-crypto administration, clearer regulations, and investor appetite for alternative assets, Ethereum set a new all-time high in August.
Kendrick believes that is just the beginning. He thinks Ethereum can grow steadily during the next four years. Ethereum started the year at about $3,335, per CoinGecko data. Using that figure, here's how much the token's price would need to grow each year to meet Standard Chartered's price targets.
| Year |
Standard Chartered Ethereum Price Target | Implied Annual Growth Rate |
|---|---|---|
| Year ending 2025 | $3,335 to $7,500 | +125% |
| Year ending 2026 | $7,500 to $12,000 | +60% |
| Year ending 2027 | $12,000 to $18,000 | +50% |
| Year ending 2028 | $18,000 to $25,000 | +39% |
Data source: Decrypt.
Ethereum celebrated its 10th birthday this summer, and the growing pains of a new asset show in its volatility. As such, it is difficult to imagine it generating the steady annual returns in the table above. But gaining more than 500% across three or four years is certainly within the realm of possibility. After all, Ethereum soared by 470% in 2020 and 400% in 2021.
These factors could drive Ethereum's growth
Historical price performance and targets are all well and good. But when considering whether to invest in Ethereum, what matters most is what might actually drive growth during a three- or four-year horizon.
CRYPTO: ETH
Key Data Points
For starters, demand is growing. Institutions and corporate treasuries now control about 10% of the total supply, according to the Strategic Ethereum Reserve site. Companies hold about 5.9 million coins on their balance sheets, worth about $24 billion. There's another 6.4 million Ethereum in exchange-traded funds (ETFs), worth about $28 billion.
Kendrick argues that Ethereum digital asset treasury companies (known as DATs) could outperform companies that have bought and hold Bitcoin. Crucially, companies can stake Ethereum. Staking involves earning rewards by locking up coins to contribute to network security. The analyst thinks that this potential for yield generation gives Ethereum DATs an edge and a better chance of survival.
Another aspect is that passage of the Genius Act during the summer spurred significant interest in stablecoins. These cryptocurrencies are pegged to other assets, such as the U.S. dollar, and they could become an important part of the global transfer and payment infrastructure. Now that the regulatory roadblocks have been removed, there's growing talk of a stablecoin boom.
For example, Standard Chartered predicts $1 trillion will move from emerging market banks and into stablecoins in the medium term. Increased stablecoin adoption could also fuel growth in decentralized finance, as well as broader investment into the crypto ecosystem. Ethereum benefits because more than half the stablecoins in circulation were issued on its blockchain, per DeFi Llama.
The recent flash crash is an important reminder
On Friday, Oct. 10, crypto's market cap fell by around 10% in about 30 minutes. The flash crash was triggered by an unexpected escalation in trade tensions between the U.S. and China, with renewed threats of tariffs.
Unfortunately, leverage exacerbates crypto price movements. CoinGlass data shows almost $19 billion in crypto liquidations -- the largest liquidation event in crypto history. While Ethereum has already erased some of its losses, it is a reminder that this is still a relatively new and untested asset class.
On that note, Ethereum could face other headwinds. For example, as major banks and institutions move into the stablecoin market, they may build their own blockchains rather than relying on Ethereum. Ethereum also faces competition from newer, faster cryptocurrency blockchains, such as Solana (SOL +0.27%).
As we saw last week, cryptocurrency prices remain volatile. It is important to understand the risks and ensure high-risk assets only make up a small portion of your wider portfolio. Ethereum may reach $25,000 by 2028, but it could also struggle to maintain this year's gains, particularly if the wider market rally stalls.
