Ethereum to $35,000, Standard Chartered drops bullish predictions
British banking giant Standard Chartered has released a rather bullish prediction on the future prices of Bitcoin and Ethereum.
The report, which was published on Tuesday, suggests that Bitcoin could trade in the $50,000 to $175,000 price range in the long term. Ethereum, on the other hand, was given a long-term price target of $26,000 to $35,000, on the condition that Bitcoin would first trade in the $175,000 region.
According to Standard Chartered’s global research team led by Geoffrey Kendrick, while Bitcoin can be viewed as a “currency,” Ethereum is more akin to a “financial market” that facilitates transactions like lending, trading, and insurance. Given the broader potential applications for Ethereum, the banking giant believes that Ethereum’s total market capitalization will eventually catch up with Bitcoin over time.
As of press time, Bitcoin was exchanging hands at $47,000 while Ether traded in the $3,700 region. To put things in perspective, Standard Chartered expects Bitcoin to increase by approximately 3.5x from its current levels and Ether about 10x from its current position.
Store of value vs. utility
There have been a few predictions suggesting that Ethereum could overtake Bitcoin in the long run. In June, Bloomberg’s Crypto Outlook said that the second-largest crypto was on track to flippen Bitcoin. They argued that Ethereum’s utility in the DeFi sector could contribute greatly to its market cap.
Standard Chartered likened the relationship between the value of global banks and the value of global credit card companies to that of Bitcoin and Ethereum. Since it views Bitcoin as a currency, it compared its future value to that of credit card companies as against the potential transactions in the unbanked sector.
While Ethereum’s long-term prediction is higher relative to its current value, Standard Chartered believes "the current price reflects both the relative complexity of ETH (versus BTC) and the uncertainty around ETH's development."
"In other words, while potential returns may be greater for ETH than for BTC, risks are also higher," the bank added.
Standard Chartered also mentioned Ethereum’s transition to proof-of-stake consensus. The bank is confident that the network’s scalability and functionality will significantly increase once the transition is completed.
Although it is a no-brainer that Ethereum currently packs more punch than Bitcoin in terms of utility, it might be wrong to assume that the development of the flagship crypto will remain constant. Recall that Twitter's Jack Dorsey recently revealed that his firm was working on a decentralized exchange for Bitcoin.