Standard Chartered sees Ethena’s USDe reaching $40B, ENA hitting $2

British multinational bank Standard Chartered expects Ethena’s $USDe stablecoin supply to grow eightfold to $40 billion by the end of 2028 as the protocol expands its sources of yield beyond crypto markets.

In a Wednesday research report shared with Cointelegraph, 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 also expects $USDe to slightly outpace overall stablecoin market growth over the period.

Its forecasts imply $ENA would also outperform Bitcoin ($BTC) and Ether ($ETH) through 2028. Standard Chartered sees $BTC reaching $300,000 and $ETH $18,000 by the end of the period.

Standard Chartered’s year-end digital asset price forecasts through 2028. Source: Standard Chartered Research

Standard Chartered said declining returns from $USDe’s traditional crypto basis trade, which involves holding spot crypto while shorting perpetual futures, have pushed Ethena to expand into DeFi and institutional lending, real-world assets and basis trades tied to equities and commodities. Those sources currently generate a blended yield of 5.2%, giving $USDe more room to scale.

The bank forecasts the broader market for tokenized assets will grow from about $350 billion today to $4 trillion by the end of 2028, expanding the pool of assets Ethena could use to generate yield.

$USDe growth could fuel $ENA buybacks

The link between $USDe growth and $ENA buybacks is central to Standard Chartered’s valuation case for the token. A fee switch approved by Ethena governance in early September directs 95% of net revenue from its business lines toward $ENA buybacks once $USDe reaches specified supply milestones.

At $25 billion in $USDe supply, Ethena estimates the mechanism could generate $375 million in annual $ENA buybacks, assuming a 6% gross protocol yield and a 25% net revenue take rate.

$ENA buyback volumes at different $USDe supply levels. Source: Ethena

Standard Chartered estimates that if $USDe reaches its $40 billion forecast and $ENA’s price remains unchanged, annual buybacks could amount to roughly 23% of $ENA’s circulating market capitalization. The bank said such a rate would likely be unsustainable, so it expects $ENA’s price to rise until buybacks settle at a lower percentage of its market value.

The bank used Uniswap as a comparison, noting that UNI’s annualized buyback rate has stabilized at around 3% to 4% as its token price increased.

$ENA was trading at about $0.27 on Wednesday, up roughly 28% over the past week and 77% over the past month, according to CoinGecko data. The token has a market capitalization of about $2.65 billion.