Standard Chartered has sharply raised its year-end price forecast for ether, the native token of the Ethereum blockchain, to $7,500, up from its earlier target of $4,000. The move reflects growing optimism over Ethereum’s expanding role in the global financial system, the explosive potential of stablecoin adoption, and renewed institutional interest.

The new projection represents a nearly 60% premium from ether’s recent peak of around $4,700 — its highest level in over three and a half years. The bank also issued a longer-term 2028 target of $25,000, citing a combination of network fee growth, improved scalability, and a shift in treasury management among corporates toward holding a portion of reserves in ether.

Stablecoin Growth Driving Ethereum Network Demand

A central factor behind Standard Chartered’s bullish revision is the expected boom in stablecoin adoption. Stablecoins are cryptocurrencies pegged to the value of a fiat currency, most commonly the U.S. dollar, and are widely used for trading, cross-border payments, and decentralized finance (DeFi) transactions.

The recently enacted Genius Act in the United States has created a regulatory framework for dollar-pegged stablecoins, providing much-needed legal clarity. Analysts at the bank believe this will accelerate both issuance and usage, projecting that the sector could expand by eight times by 2028. This growth is significant because the vast majority of stablecoins are issued and transacted on the Ethereum blockchain.

Every stablecoin transfer on Ethereum requires a small amount of ether to pay transaction fees, creating a direct link between stablecoin activity and demand for ether. As more stablecoins circulate, network fees are expected to rise sharply, enhancing Ethereum’s economic security and rewarding validators who process transactions.

Standard Chartered notes that Ethereum’s fee market is uniquely positioned to capture this growth due to its dominance in DeFi and smart contract applications, areas where competitors have struggled to achieve the same network effects. “Ether is not just a store of value — it’s the fuel that powers an entire ecosystem,” the report observes.

Institutional Interest and Staking Incentives

Another driver behind the higher price target is the growing willingness of institutional investors to hold ether as a strategic asset. Unlike bitcoin, whose utility is primarily tied to its role as a store of value, ether offers staking rewards — a yield-generating mechanism in which holders lock up their tokens to help secure the network.

By staking, investors can earn annual returns in the form of newly issued ether and transaction fees, effectively turning the cryptocurrency into an income-generating digital asset. This feature has attracted the attention of corporate treasuries, which are increasingly looking to diversify holdings beyond traditional cash and bonds.

Standard Chartered estimates that treasury allocations could eventually account for up to 10% of all ether in circulation. Such an allocation trend would significantly reduce the amount of ether available for trading, potentially amplifying price movements when demand rises.

The bank also points to Ethereum’s upgrades to network scalability — specifically improvements to its Layer 1 blockchain — as a long-term catalyst. By enabling faster and cheaper high-value transactions, Ethereum could secure a larger role in tokenizing real-world assets and supporting large-scale institutional financial activity.

Regulatory Clarity and Market Momentum

Ether’s price has already surged more than 50% in the past month, fueled in part by optimism over the regulatory progress in the U.S. The Genius Act’s passage has been interpreted as a signal that lawmakers are moving toward integrating blockchain-based payment systems into the mainstream financial infrastructure.

Market sentiment has also been boosted by the broader cryptocurrency rally, with bitcoin trading near multi-year highs. However, Standard Chartered’s view is that Ethereum’s use-case-driven demand makes it less reliant on speculative cycles compared to bitcoin. The combination of growing transaction fee revenues, staking yields, and expanding DeFi and stablecoin activity creates a more durable demand profile.

While the forecast is optimistic, the bank does acknowledge risks. Potential delays in Ethereum’s network upgrades, stricter-than-expected regulations in key jurisdictions, or competition from alternative blockchains could slow adoption. Nevertheless, it argues that Ethereum’s entrenched position as the dominant smart contract platform gives it a structural advantage.

With these factors combined — regulatory clarity, stablecoin expansion, staking incentives, and increasing institutional uptake — Standard Chartered sees a clear path for ether to reach $7,500 before the end of the year, and potentially much higher over the longer term.

(Adapted from Invesitng.com)