Standard Chartered forecasts USDe at $40 billion and ENA at $2 by 2028

Standard Chartered expects Ethena's USDe stablecoin supply to grow eightfold to $40 billion by the end of 2028. In a Wednesday research report, the bank initiated coverage of Ethena's ENA token with a year-end 2028 price target of $2, roughly seven times the $0.28 price cited in the report. Standard Chartered expects USDe to grow slightly faster than the overall stablecoin market over that period. The bank's forecasts imply ENA would outperform Bitcoin and Ether through 2028. Standard Chartered forecasts Bitcoin at $300,000 by the end of 2028. The bank forecasts Ether at $18,000 by the end of 2028. Standard Chartered said declining returns from USDe's traditional crypto basis trade have pushed Ethena to expand into decentralized finance and institutional lending, real-world assets, and basis trades tied to equities and commodities. The traditional trade involves holding spot crypto while shorting perpetual futures. Standard Chartered said the expanded sources currently generate a blended yield of 5.2%, giving USDe more room to grow. The bank forecasts that the market for tokenized assets will grow from about $350 billion today to $4 trillion by the end of 2028. That growth would expand the pool of assets Ethena could use to generate yield. Ethena governance approved a fee switch in early September that directs 95% of net revenue from its business lines toward ENA buybacks once USDe reaches specified supply milestones. Ethena estimates the mechanism could generate $375 million in annual ENA buybacks at $25 billion in USDe supply, assuming a 6% gross protocol yield and a 25% net revenue take rate. Standard Chartered estimates annual buybacks could equal roughly 23% of ENA's circulating market capitalization if USDe reaches $40 billion and ENA's price remains unchanged. The bank said that rate would likely be unsustainable and expects ENA's price to rise until buybacks represent a lower share of its market value. Standard Chartered compared ENA with Uniswap's UNI token, whose annualized buyback rate it said stabilized at around 3% to 4% as its price rose. ENA traded at about $0.27 on Wednesday, up roughly 28% over the past week, according to CoinGecko data. CoinGecko data showed ENA was up 77% over the past month and had a market capitalization of about $2.65 billion.