Standard Chartered's head of digital asset research, Geoff Kendrick, argues that Strategy's $2.5 million Bitcoin sell-off marked an unexpected inflection point for Ethereum, creating conditions that could favor the second-largest cryptocurrency for months to come.
Although Ethereum has trailed Bitcoin for much of the past year, investor reaction to Strategy's liquidation generated one of Ethereum's largest single-day outperformance spikes against Bitcoin since the start of 2024. Kendrick noted that Ethereum has recorded better daily gains relative to Bitcoin — on days when Bitcoin falls — only 23 times since January 2024, underscoring how rare the move was.
In a Tuesday research note, Kendrick projected that Bitcoin's dominance over Ethereum will erode to levels last seen in September, with the ETH/BTC ratio falling to approximately 0.04 by year-end. Under that scenario, assuming Bitcoin's price holds steady at around $67,300, Ethereum would climb roughly 41% from its current level of approximately $1,900 to about $2,700.
Kendrick also highlighted a structural difference between companies that accumulate Ethereum versus those that hold Bitcoin. Firms holding Ethereum can stake their assets to earn rewards by participating in transaction validation, effectively generating ongoing revenue. That income stream reduces the pressure to sell holdings — a contrast to Bitcoin-focused treasury strategies, which offer no comparable yield mechanism.
The bank had already set a year-end price target of $4,000 for Ethereum the previous week, arguing that the asset's current market price is deeply disconnected from its improving on-chain fundamentals. Kendrick drew a parallel to Amazon's dramatic decline during the collapse of the dot-com bubble — a period when the company's underlying business continued to strengthen even as its stock price cratered.
The ETH/BTC ratio, which Kendrick's analysis centered on, peaked in August of last year at 0.042, coinciding with Ethereum reaching an all-time high of nearly $5,000. Since 2022, however, the ratio has trended lower as Bitcoin has reasserted its dominance in the broader crypto market.
Looking further ahead, Kendrick sees Ethereum as a primary beneficiary of Wall Street's expanding interest in stablecoins as a form of modern money and in tokenization as new financial market infrastructure. That view has been echoed by major asset managers, including BlackRock, which has acknowledged Ethereum's leading position in both sectors.
Kendrick's long-term forecasts are notably bullish: he has penciled in a price of $40,000 for Ethereum by the end of the decade, while projecting Bitcoin could reach $500,000 over the same timeframe.
The broader question of whether Ethereum and other altcoins can sustain a period of outperformance — historically known as "alt season" — remains debated. In previous crypto market cycles, Bitcoin's surge to all-time highs has typically been followed by a rotation into alternative assets. However, some analysts argue that Bitcoin's market structure has matured significantly following the introduction of spot exchange-traded funds, potentially altering that long-established dynamic.
Why it matters
The ETH/BTC ratio is a closely watched signal of relative strength between the two largest cryptocurrencies; a shift toward Ethereum can indicate a broader rotation in crypto market sentiment, affecting how traders and funds allocate between the two assets.
Ethereum's staking mechanism gives companies that hold it a built-in yield source through transaction validation rewards, structurally reducing the need to sell holdings compared to Bitcoin treasury strategies, which generate no comparable income.
Kendrick's comparison to Amazon during the dot-com collapse — where the underlying business kept improving even as the stock price fell sharply — reflects his argument that Ethereum's on-chain fundamentals are strengthening even while its market price lags, a distinction he believes the market has not yet priced in.
Ethereum's established role in stablecoins and tokenization infrastructure, recognized by major asset managers, means that growth in those sectors could translate into increased demand for the network regardless of broader crypto market cycles.
