Standard Chartered Bank report: Ethereum is more risky than Bitcoin and has more complex regulation

Multinational bank and financial services giant Standard Chartered Bank has released an Ethereum investor report, in which the company's analysts are bullish on Ethereum, valuing Ethereum at $26,000-35,000 and believing that Bitcoin could reach $175,000.

The report notes that Ethereum and Bitcoin have a lot in common, but the Ethereum blockchain has use cases such as smart contracts, decentralized autonomous organizations (DAOs), decentralized finance (DeFi), non-fungible token (NFT) assets and initial coin offerings (ICOs), and the move to proof of stake has "clear environmental advantages."
Three researchers from Standard Chartered Bank said that "while ETH's potential returns may be higher than BTC, the risks are also higher."
Therefore, the analyst believes that structurally, a valuation of $26,000-35,000 is warranted for Ethereum. However, the report also states that Bitcoin needs to reach $175,000 before Ethereum reaches this price.
The report also discusses the “regulatory landscape” and the “competitive landscape,” mentioning blockchains that compete with Ethereum in the DeFi, NFT, and Dapps sectors, emphasizing that “independent ecosystems already exist and may continue to challenge Ethereum in niche areas.”
In addition to NFT, DAO, DeFi, ICO and other applications, Standard Chartered's report also highlights the upcoming Ethereum 2.0 transition. Standard Chartered researchers stressed: "This transition has obvious environmental advantages. Because it eliminates the need to use too much computer power in 'mining'. The transition from proof of work (PoW) to proof of stake (PoS) is expected to be gradually implemented in the first half of 2022."

Standard Chartered also discussed issues such as “sharding,” “from EVM to eWASM,” and Ethereum’s overall supply. The report also pointed out that scaling Ethereum and the launch of ETH 2.0 is a difficult task.
“ETH 2.0 is complex, a comprehensive upgrade to an already complex platform. The complexity is exacerbated by the fact that ETH 1.0 and ETH 2.0 have been running in parallel for a long period of time,” the researchers said.

The bank’s report concluded that regulatory issues related to Ethereum will be very different from those of Bitcoin. But regulators will likely pursue the same three broad goals: combating illicit activity, ensuring financial stability, and protecting investors.
A big unknown is whether ETH 2.0 will continue to be classified as a commodity or a security. The U.S. Securities and Exchange Commission (SEC) initially stated that the Ethereum platform is "sufficiently decentralized" to allow for classification as a commodity. But the transition to PoS may challenge this view.
If the SEC determines that ETH 2.0 is a security, it will need to comply with all accompanying regulations and could face retroactive financial penalties. This is a gray area that is controversial on both sides. In addition to this specific risk, the Ethereum network facilitates a large number of services (dApps, DeFi, ICOs), which may create a more complex regulatory environment in the future. (Bitpush)