Standard Chartered Predicts Ethereum Will Outperform Bitcoin After Strategy Sells BTC

TLDR

• Standard Chartered’s Geoffrey Kendrick says Strategy’s BTC sale marks a turning point for Ethereum vs Bitcoin
• ETH recorded one of its largest single-day outperformance spikes against BTC since 2024
• Kendrick predicts ETH could rise 41% to ~$2,700 by year-end, with a $4,000 year-end target
• Ethereum treasury firms can stake ETH for yield, giving them an edge over Bitcoin-holding firms
• BTC dropped nearly 5% on the day while ETH held steady, down less than 2%

Standard Chartered’s head of digital asset research, Geoffrey Kendrick, says Strategy’s recent Bitcoin sale could mark the beginning of Ethereum outperforming Bitcoin. He shared this view in a note to clients on Tuesday.

Strategy sold approximately $2.5 million worth of Bitcoin — its first sale since 2022. Kendrick said that move created favorable conditions for Ethereum that could last.

After the sale was disclosed, Ethereum posted one of its largest daily gains relative to Bitcoin since the start of 2024. That type of move has only happened 23 times since then.

Bitcoin dropped to as low as $68,000 on the day, falling nearly 5%. Ethereum held above $1,900, down less than 2% over the same period.

Why Kendrick Sees a Shift Coming

Kendrick says Ethereum’s price doesn’t reflect what’s happening with the network. He recently compared the gap between ETH’s price and its fundamentals to Amazon’s situation during the dot-com crash — where the underlying business was improving even as the stock fell.

He has set a year-end price target of $4,000 for Ethereum. He also predicts the ETH/BTC ratio will fall to 0.04 by year-end, a level not seen since September. That would put Bitcoin around $67,300 and Ethereum around $2,700, a 41% rise from current levels.

Kendrick says his view won’t change even if Strategy buys back more Bitcoin than it sold. He believes the structural setup for Ethereum has changed.

ETH is currently down 22% year-to-date, which is more than Bitcoin’s losses over the same period. Despite that, Kendrick sees this underperformance as part of the setup for a reversal.

Ethereum Treasury Firms Have a Yield Advantage

Kendrick also pointed out a key difference between Ethereum and Bitcoin treasury companies. Firms that hold Ethereum can stake it to earn yield by helping validate transactions on the network. That means they have less reason to ever sell their holdings.

Bitcoin treasury firms, including Strategy, don’t have that option. They can’t generate income from simply holding BTC.

Kendrick predicts Ethereum treasury firms will soon carry a higher Market Net Asset Value than Strategy. The mNAVs of most digital asset treasury companies have dropped recently, tracking the broader crypto market decline.

Tom Lee, chairman of Bitmine — an Ethereum treasury firm — echoed Kendrick’s view. He said Ethereum’s price doesn’t reflect the strength of its network fundamentals.

Both Strategy and Bitmine have continued buying their respective assets despite the market downturn. Strategy has been using its preferred security, STRC, to fund recent Bitcoin purchases as its stock has declined.

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