The Daily: Ethereum's 'midlife crisis' sees Standard Chartered cut 2025 price target to $4,000, South Korea rules out bitcoin reserve and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

I hope you had a great weekend, folks. Even tradfi now appears to be piling in on the bearish sentiment toward Ethereum as the second-largest cryptocurrency enters its "midlife crisis."

In today's newsletter, Standard Chartered cuts its 2025 ether price target by 60% to $4,000, South Korea's central bank rules out a bitcoin reserve, acting SEC Chair Mark Uyeda directs staff to reconsider a proposed crypto rule change for the second time this month and more.

Meanwhile, Solana futures debut today on the CME: Here's what you need to know.

Let's get started.

Standard Chartered cuts year-end ether target to $4,000

International bank Standard Chartered has slashed its 2025 ether price target by 60% from $10,000 to $4,000, citing factors like Base's growing market share.

• "Layer 2s, and Base in particular, now extract super-profits from the Ethereum ecosystem," Standard Chartered Global Head of Digital Assets Research Geoffrey Kendrick said in a statement on Monday while sharing his new report titled "Ethereum — Midlife Crisis."
• "We estimate that Base (the dominant Layer 2) has removed $50 billion of market cap from Ethereum alone," he said.
  Kendrick argues that Ethereum has essentially "commoditized itself" within its self-created Layer 2 framework, with a growing share of transaction fees now bypassing the Layer 1 chain.
• "The solution would be to tax Layer 2 super-profits in the same way governments sometimes charge super taxes for foreign-owned mining companies that extract excess profits. Unless that happens, ETH/BTC will keep going down," Kendrick said, though he doesn't see that as a likely development.
• Other factors, including The Merge and Ethereum's Dencun upgrade, "while perhaps necessary, have been value destructive," Kendrick added.
• Ether is currently trading at around $1,932, over 60% down from its all-time high of approximately $4,878 in November 2021, with the ETH/BTC ratio at its lowest level since May 2020.
• Kendrick forecasts ether to appreciate to $7,500 by 2028 to 2029 but predicts a continued decline for the ETH/BTC ratio in the interim.

South Korea's central bank rules out bitcoin reserve

The Bank of Korea has ruled out the idea of creating a bitcoin reserve, citing its high volatility.

• The South Korean central bank was responding to a written query from a member of the National Assembly's Strategy and Finance Committee.
• Bitcoin also does not comply with the International Monetary Fund's guidelines for foreign exchange reserve management, which prioritize liquidity and risk controls, the BOK said.
• In contrast, President Trump is moving forward with plans to create a bitcoin reserve in the U.S. The Czech central bank is also exploring options for investing in additional asset classes, including bitcoin.

SEC to reexamine proposed crypto custody rule

Acting Securities and Exchange Commission Chair Mark Uyeda has directed staff to reconsider a proposed rule that would tighten cryptocurrency custody requirements for registered investment advisers.

• The rule, initially proposed under the Biden administration, would require advisers to keep crypto with a qualified custodian, such as a bank or broker-dealer, and for those custodians to abide by certain requirements. 
• Uyeda's move signals a continued shift for the agency under the new Trump administration, marking the second time this month he has asked staff to revisit SEC rules.
• Last week, he directed SEC staff to review a proposed rule change that would expand the definition of an "exchange" in a way that could potentially loop in decentralized crypto projects.

Global crypto funds' outflow streak hits record $6.4 billion

Global crypto investment products saw a further $1.7 billion in net outflows last week, as their worst-ever negative streak hit $6.4 billion.

• U.S. investors continued to lead the exodus, accounting for $1.16 billion of last week's withdrawals and 93% of all outflows during the record five-week run.
• As usual, Bitcoin-based products led the flows with another $978 million exiting global funds, bringing their total net outflows to $5.4 billion during the period.
• Ethereum and Solana funds also experienced outflows of $175 million and $2.2 million, respectively, while XRP continued to buck the trend, adding $1.8 million.
• Meanwhile, Canary Capital filed with the SEC on Monday for what could be the first Sui ETF.

Strategy nears 500,000 BTC amid smaller bitcoin buy

Strategy (formerly MicroStrategy) bought another 130 BTC for $10.7 million at an average price of $82,981 per bitcoin last week, according to an 8-K filing with the SEC — far less than its recent purchases, which have run into the billions.

• Strategy acquired its latest bitcoin using proceeds from the sale of its perpetual strike preferred stock, STRK.
• The company now holds 499,226 BTC, worth over $41 billion, bought at an average price of $66,360 per bitcoin for a total cost of around $33.1 billion — representing 2.38% of bitcoin's total supply.

In the next 24 hours

• It's quiet on the economic calendar front.
• Mantra and EigenLayer are set for token unlocks.

Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.