Standard Chartered says Ethena’s ENA could crush Bitcoin and Ethereum returns by 2028

Standard Chartered anticipates that Ethena’s ENA token will multiply in value by approximately seven times by the year 2028, assuming the protocol successfully revitalizes its contracting synthetic-dollar operations.

The financial institution has initiated coverage on ENA, assigning a price target of $2 by the end of 2028, a significant increase from its current level near $0.28. The bank’s trajectory outlines the token reaching $0.42 by the close of 2026, advancing to $1.10 in 2027, and experiencing further acceleration the following year.

If these projections hold, ENA will outpace Standard Chartered’s projected returns for both Ethereum and Bitcoin over the identical timeframe. Nevertheless, achieving this milestone requires Ethena to reverse a recent downturn—which has seen the supply of USDe drop by over 50% from its all-time high—and scale to unprecedented levels.

The core of the bank’s thesis relies on Ethena discovering alternative yield streams as income from its original cryptocurrency trading strategy decreases. It must simultaneously generate sufficient revenue from a vastly expanded USDe supply to elevate the fundamental value of ENA for its holders.

Ethena first has to rebuild USDe

Following its introduction in late 2023, USDe rapidly evolved into one of the digital asset sector’s fastest-growing stablecoins, surpassing $10 billion as traders gravitated toward a strategy pairing long spot crypto positions with short perpetual futures.

This mechanism enabled Ethena to harvest funding payouts while keeping its aggregate market exposure largely delta-neutral. The strategy occasionally yielded returns exceeding 20%, successfully drawing capital into USDe and its yield-generating companion, sUSDe.

However, broader market compression has since undermined those operating conditions.

As the trade attracted heavier participation and crypto funding rates contracted, the supply of USDe retreated to roughly $4.9 billion. Standard Chartered estimates that Ethena’s blended yield across its current strategies sits near 5.2%.

The bank’s outlook relies on a sharp reversal of this contraction. It projects that USDe supply will climb to $40 billion by 2028, meaning Ethena must first recover its previous peak of over $10 billion before scaling up roughly fourfold once more.

To offset shrinking crypto basis returns, Ethena has expanded its yield-generation avenues. Its portfolio now incorporates decentralized finance lending, institutional lending, liquid stablecoins, and real-world assets, alongside emerging basis trades focused on commodities and equities.

This diversification forms a cornerstone of Standard Chartered’s growth assumptions.

The institution forecasts that tokenized assets—encompassing stablecoins and alternative real-world assets—will expand from roughly $350 billion today to approximately $4 trillion by the conclusion of 2028. Furthermore, it projects that blockchain-deployed real-world assets could surge from about $40 billion to $2 trillion during the same period.

A more robust tokenized-asset ecosystem would furnish Ethena with additional collateral and yield prospects extending beyond crypto derivatives, potentially facilitating USDe expansion without depending on a recurrence of exceptionally high perpetual-futures funding rates.

Beyond its core synthetic dollar, Ethena is also developing secondary ventures, including Ethena Pay and white-label stablecoins. Standard Chartered anticipates these initiatives will broaden the protocol’s revenue foundation as expansion continues.

Even so, the initial benchmark sits considerably closer than the $40 billion mark.

Ethena’s authorized fee-switch framework activates at a $7.5 billion USDe supply threshold, keeping the protocol currently beneath the initial trigger point required to initiate the revenue mechanisms central to Standard Chartered’s valuation model.

Why the buyback math leads to $2

Once those milestones are cleared, the valuation of ENA hinges directly on the proportion of Ethena’s financial performance that can be channeled toward token holders.

The approved framework directs 95% of qualifying net revenues—forwarded to the Ethena Foundation from covered segments—toward ENA repurchases. Because Ethena does not retain the entirety of the yield generated by assets backing USDe, the distinction between gross and net revenue remains vital to these calculations.

An analysis by Blockworks Advisory modeled the protocol’s share of gross revenue expanding alongside USDe supply, starting near 5% at a $7.5 billion valuation and scaling to 20% at $20 billion. This model relied on a hypothetical 6% protocol yield rather than a guaranteed return.

Under the expansive scale envisioned by Standard Chartered, these economics generate significant figures.

The bank calculates that if USDe hits $40 billion, annual ENA buybacks could account for approximately 23% of the token’s existing market capitalization, provided the price remained static.

Standard Chartered does not expect this specific percentage to endure. Instead, it argues that market participants would price the anticipated buyback stream directly into ENA, driving the token’s value higher and lowering annual buybacks as a relative share of total market capitalization.

As a historical parallel, the bank cites Uniswap, noting that UNI’s annualized buyback rate settled around 3% to 4% following price appreciation after its own fee switch activation. Applying a comparable equilibrium to Ethena supports Standard Chartered’s target of $2.

Nevertheless, this structural mechanism introduces distinct internal challenges.

Capturing a larger portion of Ethena’s revenue for the protocol itself can diminish the distributions left for sUSDe holders. This dynamic demands careful balance: Ethena must secure adequate margins to fund ENA buybacks while preserving competitive yields to retain the deposits essential for USDe expansion.

These projections become increasingly demanding as supply milestones grow. The baseline 6% return utilized within the framework is not guaranteed across varying market cycles, and the elevated revenue-capture tiers remain untested at the magnitude Standard Chartered anticipates.

Consequently, investors face several immediate hurdles before the $2 target gains relevance. USDe must first cross the $7.5 billion fee-switch threshold and recover its prior supply peak.

Beyond those steps, Ethena must demonstrate that its newer yield strategies can absorb tens of billions of dollars without severely compressing returns. The speed at which these milestones are cleared will dictate whether Standard Chartered’s anticipated buyback framework matches the mechanics outlined in its valuation model.

?अक्सर पूछे जाने वाले प्रश्न

01What is Standard Chartered’s price target for Ethena’s ENA token?

Standard Chartered has issued a year-end 2028 price target of $2 for ENA, up from its current valuation around $0.28.

02What does Ethena need to achieve to reach this price target?

Ethena must reverse its recent supply contraction, rebuild USDe supply to $40 billion by 2028 (surpassing its previous $10 billion peak), and successfully implement diversified yield strategies beyond core crypto derivatives.

03How do ENA buybacks function within the protocol?

The approved framework directs 95% of qualifying net revenues paid to the Ethena Foundation from covered businesses toward ENA buybacks, which activate once USDe supply crosses the $7.5 billion threshold.