Standard Chartered: Analyzing the Logic Behind Our Optimism for Ethereum Reaching $7,500 by Year-End

‍Standard Chartered Bank stated that even if the second largest cryptocurrency, Ethereum, surged to its all-time high of $4,955 on August 25, the valuation of Ethereum and its treasury-holding companies remains underestimated.

Geoffrey Kendrick, Head of Crypto Research at the bank, said that since June, treasury companies and ETFs have absorbed nearly 5% of the circulating Ethereum, with treasury companies purchasing 2.6% and ETFs increasing their holdings by 2.3%.

The combined 4.9% holding ratio is one of the fastest accumulation cycles in crypto history, surpassing the pace at which BTC treasuries and ETFs increased their holdings by 2% of the circulating supply at the end of 2024.

Kendrick stated that the recent buying frenzy marks the early stage of a broader accumulation cycle. In his July report, he predicted that treasury companies could eventually control 10% of the circulating Ethereum.

Kendrick believes that since companies like BitMINE have publicly set a 5% holding as their target, this goal seems achievable. He pointed out that this means there is still 7.4% of the circulating supply left to be accumulated, which will provide strong support for Ethereum’s price.

The rapid pace of accumulation highlights the increasingly important role of institutional players in the cryptocurrency market. Kendrick noted that the synergy between ETF inflows and treasury accumulation forms a “feedback loop,” which could further tighten supply and push prices higher.

Kendrick raised the bank’s previous forecast, stating that Ethereum could climb to $7,500 by year-end. He also said that the current pullback is an “excellent entry point” for investors to position themselves for subsequent capital inflows.

Although buying pressure has pushed up Ethereum’s price, the valuation of Ethereum-holding companies has moved in the opposite direction.

SharpLink and BitMINE are two of the most established Ethereum treasury companies, and their net asset value (NAV) multiples have fallen below that of the largest Bitcoin treasury company, Strategy.

Kendrick stated that this valuation discount is unreasonable, as Ethereum treasury companies can earn a 3% staking yield, while the Bitcoin held by Strategy cannot generate such returns.

He also mentioned that SBET recently plans to buy back shares when its NAV multiple falls below 1.0, saying this sets a “solid floor” for the valuation of Ethereum treasury companies.