The future of Ethereum is shrouded in uncertainty, especially with price predictions for 2025 being lowered. After slipping below the $2,000 mark, Ethereum continues to shake the confidence of investors, with banking giant Standard Chartered revising its Ethereum forecast for 2025 from $10,000 to $4,000.

This decline follows losses in Ethereum’s market share as Layer-2 (L2) solutions that take transaction fees from Ethereum’s main network continue to grow. Economists warn that a decrease in Ethereum’s future economic activities could negatively impact the network’s long-term value.

ETH’S MARKET POSITION AND LAYER-2 SOLUTIONS
Facing increased competition from Layer-2 solutions, Ethereum is going through a challenging period. Geoffrey Kendrick from Standard Chartered notes that Ethereum has now become a “commodity.” Users shifting towards Layer-2 solutions offering cheaper and faster transaction fees threaten Ethereum’s revenue model. L2 solutions divert revenues from Ethereum’s validators to other platforms, weakening Ethereum’s market share. Allegations that Coinbase’s Base blockchain has siphoned $50 billion from Ethereum’s market value highlight the seriousness of this situation.

The decline in Ethereum’s revenue model has sparked heightened scrutiny from analysts. While L2s increase transaction volumes on Ethereum’s network, concerns arise about the sustainability of ETH’s fee-based revenue structure in the long run. Ethereum may need to make radical reforms to address these challenges, or else risk losing its position as the leading platform for smart contracts.

MARKET ANALYSIS AND TECHNICAL INDICATORS
Ethereum’s price predictions remain bearish, as ETH struggles to surpass the $2,000 resistance level and indicators point towards a potential decline to $1,500. Technical indicators, especially the Relative Strength Index (RSI) and Stochastic Oscillator, indicate increasing downward momentum for Ethereum. Liquidations in the crypto market amplify the atmosphere of uncertainty. According to Coinglass data, last week saw $30.21 million in futures contracts liquidated, with movements around $15.77 million and $14.25 million in long- and short-term trades, respectively. However, if the Ethereum price stays above $2,200 in daily closings, it could initiate a bull run towards $2,800.

INSTITUTIONAL DEMAND AND COMPETITION
Institutional demand for Ethereum has fallen to its lowest levels in recent years, as rival blockchains gain momentum. While Ethereum continues to be the leading platform for dApps and smart contracts, increasing competition from rival blockchains further erodes its market share. This underscores one of the biggest factors questioning Ethereum’s future leadership.

THE FUTURE PERSPECTIVE OF ETHEREUM
While Kendrick suggests that Ethereum could impose fees on Layer-2 networks to recoup lost revenue, he is not optimistic about the strategy’s effectiveness. Citing governments placing taxes on state-owned mining companies as an example, he questions to what extent Layer-2 solutions can improve Ethereum’s revenue structure. Without intervention, the likelihood of Ethereum underperforming among crypto investors in the long term increases.

Standard Chartered predicts a continued decrease in Ethereum’s blockchain economic activities until 2027. While short-term recoveries are possible, the adoption of Layer-2 solutions will make it harder for Ethereum to regain its past leadership in the digital asset market. Some analysts believe that Ethereum’s long-term success hinges on how effectively it can manage Layer-2 integrations. Gradual transition to Ethereum 2.0, increased scalability, and efficiency may mitigate the impact of Layer-2 solutions, but these upgrades are necessary for restoring confidence in the network’s economic health.