British multinational bank Standard Chartered projects that Ethena’s USDe stablecoin will grow eightfold from $5 billion to $40 billion by the end of 2028. The bank’s research also set a $2 price target for the ENA token over the same period - roughly a 7x leap from its $0.28 price when the report was published.
In the spot market, ENA traded around $0.27 with a market capitalization of $2.65 billion on the day the report was released. The token logged a 28% gain over the past week and surged 77% over the past month. The growth projection for USDe slightly outpaces broader stablecoin market trends, aligning with Standard Chartered’s forecast that Bitcoin will reach $300,000 and Ethereum $18,000 by the end of 2028. Beyond crypto, the global tokenized assets market is also projected to expand from $350 billion to $4 trillion over the same timeframe.
New Yield Sources
Declining yields from traditional crypto basis trades have prompted Ethena to expand into alternative yield sources. The protocol has begun tapping into DeFi, institutional lending, real-world assets (RWAs), as well as equity and commodity basis trades. Together, these combined yield sources currently deliver a blended yield of 5.2%.
ENA Buyback Calculations
An Ethena governance decision in early September approved the activation of a fee switch that redirects fund flows. The new rule mandates that 95% of net revenue be channeled into an ENA buyback program once USDe supply crosses a specified target threshold.
In a scenario where USDe supply reaches $25 billion, Ethena estimates the buyback mechanism could deploy $375 million annually to purchase ENA tokens from the open market. That calculation assumes a 6% gross yield and a 25% net revenue take rate.
Standard Chartered highlighted the impact of this buyback mechanism. If USDe indeed hits $40 billion while the ENA token price remains unchanged, annual buyback volume would equal 23% of ENA’s circulating market cap. The bank argued that such heavy buying pressure is unsustainable with stagnant prices, effectively forcing ENA’s price upward.
A $2 price target may seem a long way from today’s $0.27 level, but the projection rests squarely on cash-flow mathematics. When an entity redirects nearly all of its revenue to absorb its own token supply from the market, price action typically follows where the money flows.
Reported via Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
