Ethereum ‘commoditized itself’ by shifting value to layer-2s, Standard Chartered says
Ethereum, the world's second-largest cryptocurrency, is facing significant challenges as its value plummets and investor interest wanes. According to analysts at Standard Chartered, Ethereum is experiencing a "midlife crisis" as it moves value to Layer 2 networks, leading to it "commoditizing" itself.
Moving Value to Layer 2 and the Consequences
Geoff Kendrick, head of digital asset research at Standard Chartered, said that the decision to move value to Layer 2 networks has caused Ethereum to "essentially commoditize itself." This means Ethereum has "given away value for free," reducing the network's appeal to investors.
Market Value and Forecast
Over the past three months, Ether's value has fallen 40%, currently trading at around $2,019.69. Standard Chartered has revised its 2025 Ether price forecast from $10,000 to $4,000, reflecting the challenges facing the network.
Internal and competitive challenges
Ethereum is also facing internal disagreements and user activity stagnation. Carol Alexander, a finance professor at the University of Sussex, notes that the vision of decentralized finance now feels “much further away than it did a year ago,” and that decision-making within the Ethereum community has become “a bit muddled.”
Competition from other blockchains like Solana and Cardano, which offer greater speed and cost efficiency, is also putting pressure on Ethereum. The rise of memecoins and the growing popularity of the Solana blockchain have taken attention away from Ethereum.
Conclusion
Ethereum is facing major strategic and governance challenges. The shift of value to Layer 2 networks has led to “commoditization” of itself, reducing its appeal to investors. To maintain its leadership, Ethereum needs to rethink its strategy and address internal issues as well as competition from other rivals.
