Standard Chartered Says Ether Could Outperform Bitcoin by More Than 40%

Strategy’s sale of Bitcoin may mark the start of a period of Ether outperformance against the largest cryptocurrency, according to Standard Chartered. The bank’s thesis is that Bitcoin treasury companies struggle to generate cash flow from their holdings, while Ether treasury firms can fund operations with staking income.

CoinDesk reported on June 2 that Geoffrey Kendrick, Standard Chartered’s global head of digital assets research, wrote in a client note that Ether could strengthen against Bitcoin after Strategy sold Bitcoin.

Kendrick said the broader crypto market fell on the day Strategy announced the sale, but Ether still clearly outperformed Bitcoin. In his view, Monday marked the start of Ether’s relative gains versus Bitcoin.

According to CoinDesk, Ether has risen about 5% against Bitcoin since June 2. Kendrick described the move as one of the largest gains in the ETH/BTC ratio on a day when Bitcoin declined since 2024.

He expects the ETH/BTC ratio to climb from about 0.028 to 0.04 by the end of this year. That would mean Ether outperforms Bitcoin by more than 40%, even if both assets rise or fall together.

The forecast rests on differences in the business models of Bitcoin treasury companies and Ether treasury companies. Bitcoin treasury firms such as Strategy depend largely on Bitcoin price appreciation and capital-market fundraising. Because Bitcoin does not generate income on its own, those companies may need to sell part of their holdings or raise additional capital to cover costs or dividend obligations.

Ether, by contrast, can generate returns through staking. Kendrick said staking yields on Ether are currently around 3% annually, giving Ether treasury companies a way to produce recurring income without selling their holdings.

He cited BitMine Immersion Technologies, chaired by Tom Lee, as a leading example. BitMine has accumulated $11 billion of Ether without issuing debt. While the company is currently carrying substantial mark-to-market losses on its holdings, it is generating about $258 million in annualized income through staking and expects annual rewards to approach $300 million through its proprietary staking platform, MAVAN.

Kendrick said that staking income makes Ether treasury companies more self-sustaining than Bitcoin-focused peers. He added that BitMine and SharpLink Gaming (SBET) currently trade at lower premiums than Strategy, but the valuation gap could narrow if investors begin to price in their recurring income.

Some market participants have argued that Strategy’s Bitcoin sale was negligible relative to its overall holdings. Kendrick said the significance of the transaction was not the $2.5 million sale itself, but what it revealed about the economics of Bitcoin treasury companies. Whether Ether is rerated against Bitcoin on the strength of staking income will be a key driver of the ETH/BTC pair going forward.