On Monday, Strategy disclosed the sale of $2.5 million in Bitcoin, a move that marked a surprising turning point in the ongoing competition between Bitcoin and Ethereum, according to Geoff Kendrick of Standard Chartered. This development, while initially focusing on Bitcoin, seemingly created favorable conditions for Ethereum, the second-largest cryptocurrency by market capitalization.
In a note shared Tuesday, Kendrick highlighted that, despite Ethereum’s struggles against Bitcoin in recent months, the market’s reaction to Strategy’s liquidation was significantly positive for Ethereum. Following the announcement, Ethereum experienced one of its most substantial price movements in relation to Bitcoin in recent years. Kendrick noted that since the dawn of 2024, Ethereum has only recorded superior daily gains against Bitcoin on 23 occasions when Bitcoin has seen declines.
Looking ahead to the end of the year, Kendrick projects that Bitcoin’s dominance over Ethereum could diminish significantly. He predicts a decline to levels not observed since September, with Bitcoin potentially valued at $67,300, while Ethereum might rise 41% to around $2,700 from its current position of $1,900.
The analysis also drew attention to a significant difference in business models between firms that buy Bitcoin and those that invest in Ethereum. Companies investing in Ethereum can stake their assets to earn rewards through transaction validation, thereby generating continual revenue without the need for frequent sales. This stands in contrast to Bitcoin-focused firms, which may not have similar opportunities.
In a previous projection, the bank set an optimistic target of $4,000 for Ethereum by the year’s end, arguing that the digital asset’s current price does not fully capture its improving internal metrics. Kendrick likened this situation to Amazon’s decline during the collapse of the dot-com bubble, suggesting a similar mispricing dynamic.
Kendrick’s insights specifically examined the “ETH/BTC” ratio, which soared to 0.042 in August last year when Ethereum approached its all-time high of nearly $5,000. Historically, however, this ratio has trended lower since 2022, particularly as Ethereum is powered by its smart contract capabilities—facilitating various applications from tokens to decentralized applications and NFTs.
Moreover, Kendrick observed that Ethereum stands to gain from Wall Street’s increasing interest in stablecoins and the broader context of tokenization, which aligns with the asset’s established importance in these sectors. Major asset managers like BlackRock have recognized Ethereum’s potential in these areas.
Looking to the future, Kendrick envisions a long-term valuation of $40,000 for Ethereum by the end of the decade, while forecasting Bitcoin to reach $500,000 in the same period. Historically, surges in Bitcoin’s value have often been followed by a phase of significant gains among alternative cryptocurrencies, referred to as “alt season.” Nevertheless, some analysts question whether this traditional dynamic will hold, especially considering the evolving market structure introduced by exchange-traded funds that have been launched for Bitcoin.
