Ethereum to $40,000? Why one analyst expects the second-biggest crypto to outperform Bitcoin

Weaker-than-expected Bitcoin performance will enable Ethereum to outperform the top crypto and hit $40,000 by 2030, according to Standard Chartered’s latest forecast.

The major British multinational bank published the prediction in a research note on January 12.

“2026 will be the year of Ethereum, much like 2021 was,” Geoffrey Kendrick, Standard Chartered’s global head of digital assets research and author of the note, said.

He argues that an improvement in Ethereum’s prospects relative to Bitcoin means the price ratio between the two assets could return to its 2021 high.

At that time, the Ethereum to Bitcoin ratio hit a high of around 0.08, meaning that the price of one Ether token was 8% the value of one Bitcoin.

However in the years since, Ethereum has lagged behind, and the ratio has dropped to around 0.03.For context, if the Ethereum to Bitcoin ratio rose to around 0.16, the two crypto assets would trade at an equal market value.

Stablecoin play

Standard Chartered’s prediction highlights how traditional financial firms are growing more and more bullish on stablecoins and tokenisation — taking real world assets such as stocks, bonds or real estate, and conferring ownership of them digitally on a blockchain.

Ethereum is currently the biggest blockchain for tokenisation, hosting more than $10 billion worth of crypto and real world assets. It also hosts the majority of all stablecoins, which are often backed by US Treasury bonds.

These factors, the bank says, put Ethereum in a strong position to take advantage of the increased interest in onchain finance.

Bitcoin, on the other hand, was not designed to accommodate programmable smart contracts, and therefore has a comparatively tiny onchain ecosystem.

US Treasury Secretary Scott Bessent predicts stablecoins could grow into a $3 trillion industry by 2030. The value of all tokenised assets on blockchains could surpass $19 trillion by 2033, according to an April report from Ripple and Boston Consulting Group.

Ethereum ETFs

Onchain finance isn’t the only reason Standard Chartered sees a brighter future for Ethereum than Bitcoin.

Investment through exchange-traded funds and digital asset treasuries is less important for Ethereum’s price performance than Bitcoin’s, the bank said.

Investors have pulled over $1.9 billion out of Ethereum ETFs since November, according to DefiLlama data. In the same time, Bitcoin ETFs have seen over $4.6 billion in outflows.

Even so, while crypto ETF flows have weakened overall, “they are more constructive for ETH than for BTC at present,” Kendrick wrote.

Additionally, Ethereum developers are working on increasing the blockchain’s transaction throughput by a factor of 10 over the next two to three years. If they’re successful, this should also give Ethereum a sizable boost.

More clarity

Finally, passage of the US’ Clarity Act, a proposed crypto market structure bill, also bodes well for Ethereum and the vast onchain ecosystem it accommodates.

The bill, should it get signed into law, will provide a comprehensive regulatory framework for decentralised finance, giving traditional financial firms more confidence to integrate blockchain technology into their offerings.

Standard Chartered said it expects the clarity Act to be passed in the first quarter of 2026.

To be sure, the bank is still bullish on Bitcoin, too.

The note reiterated its Bitcoin price prediction of $500,000 by 2030, while also lowering its near-term Ethereum price targets for 2026 from $12,000 to 7,500, and from $18,000 to $15,000 for 2027.

“We expect Clarity Act passage, along with solid US equity-market performance, to push BTC to a fresh all-time high in H1, defying fears of further price declines at this stage of the Bitcoin ‘halving’ cycle,” Kendrick said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at [email protected].