Standard Chartered has significantly lowered its year-end cryptocurrency outlook, predicting that Bitcoin (BTC) will fall to $50,000 and Ethereum (ETH) to $1,400 in a phase of 'capitulation' over the next few months, before recovering by the end of 2026.

What happened: Banks, cryptocurrency outlook downgraded

In a new report, Standard Chartered expects further price declines in digital assets in the short term. The bank lowered its Bitcoin target from $150,000 to $100,000 by the end of 2026, and also downgraded its Ethereum outlook from $7,500 to $4,000.

The report identified the decrease in ETF holdings and the deteriorating macroeconomic environment as major factors. The average BTC ETF holding size has currently decreased by about 25%, and the market expects no further interest rate cuts until Kevin Warsh takes over as Fed Chair in June. Standard Chartered pointed out that this situation increases the likelihood that ETF holders will opt for selling rather than buying at low prices.

However, the bank emphasized that its long-term outlook through 2030 remains unchanged. It also stated that unlike in 2022, no digital asset platforms collapsed during this sell-off phase, suggesting that the resilience of this asset class is strengthening.

Related article: XRP Drops 33% But Nine-Year Trendline Holds Strong

Why it matters: A deeper adjustment phase outlook

Standard Chartered presented in this report that Bitcoin's short-term low is projected at $50,000 and Ethereum at $1,400, which is relatively limited in decline compared to past cycles. The bank expects that other digital assets will also follow major coins in further declines, recovering from the second half of the year and returning to adjusted target price levels.

This outlook can significantly impact the market as it is an analysis from a representative bank that actively deals with digital assets in traditional finance. If such a decline scenario materializes, the expected price adjustment could test investor confidence, and at a time when macroeconomic uncertainty is suppressing the preference for risk assets, it could further dampen sentiment across the cryptocurrency market.

Next read: Ethereum Loses $2,000 Level Amid Bearish Momentum