Standard Chartered: Analyzing Our Logic for a Bullish Ethereum Year-End Surge to $7,500

Standard Chartered Bank stated that even though the second largest cryptocurrency, Ethereum, soared to its historical high of $4955 on August 25, the valuation of Ethereum and the companies holding its treasury remains undervalued.

Geoffrey Kendrick, head of Crypto Assets research at the firm, stated that since June, treasury companies and ETFs have absorbed nearly 5% of the circulating Ether, with treasury companies purchasing 2.6% and ETFs increasing their holdings by 2.3%.

The combined holding ratio of both is 4.9%, making it one of the fastest accumulation cycles in the history of Crypto Assets, surpassing the speed of the 2% increase in circulation of BTC treasury and ETF holdings at the end of 2024.

Kendrick stated that the recent wave of accumulation marks the early stages of a broader accumulation cycle. In his July report, he predicted that treasury companies could ultimately control 10% of the circulating Ether.

Kendrick believes that given that companies like BitMINE have publicly set a target of 5% holdings, this goal seems achievable. He points out that this means there is still 7.4% of the circulating supply to be increased, which will provide strong support for the price of Ethereum.

The rapid accumulation pace highlights the increasingly important role of institutional entities in the Crypto Assets market. Kendrick stated that the synergy between ETF capital flows and treasury accumulation forms a "feedback loop," which may further tighten supply and drive prices higher.

Kendrick raised the bank's previous forecast, stating that Ether could climb to $7,500 by the end of the year. He also mentioned that the current pullback is an "excellent entry point" for investors to position themselves for subsequent capital inflows.

Despite the buying pressure pushing up the price of Ethereum, the valuation of companies holding Ethereum has shown an inverse trend.

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

Kendrick stated that this valuation discount is unreasonable because the Ethereum treasury company can obtain a 3% staking yield, while the Bitcoin held by Strategy cannot generate such yields.

He also mentioned that SBET plans to repurchase shares when its NAV multiple is below 1.0, calling this a "solid bottom" for the valuation of the Ethereum treasury company.