Standard Chartered initiated coverage of Ethena on September 30 with a $2 price target for the ENA token by the end of 2028, roughly seven times its price of $0.28 when the note was published. The bank’s research team also forecast that USDe, Ethena’s synthetic dollar, would grow from $4.9 billion to $40 billion in circulation over the same period.
The call rests on two moving parts. First, USDe supply has to expand more than eightfold. Second, Ethena’s buyback mechanism has to scale with it, directing an increasing share of protocol revenue into ENA purchases. The bank frames the token as a leveraged bet on both, and it put numbers on each.
How the buyback switch works
Ethena’s fee switch is not active yet. It only turns on once USDe circulating supply reaches $7.5 billion on a 14-day average. From that point, the share of revenue routed to buybacks climbs in steps: a base level at activation, 10% of revenue at $10 billion of supply, 15% at $15 billion, and 20% at $20 billion.
At $25 billion of USDe, Ethena’s own estimate puts annual ENA buybacks at $375 million, assuming a 6% gross protocol yield and a 25% net revenue take rate. Standard Chartered took the math further. If USDe hits the bank’s $40 billion forecast while ENA’s price stays flat, annualized buybacks would consume about 23% of the token’s entire circulating market value each year.
That ratio is the core of the bull case. A sustained buyback at that scale, against a fixed or slowly growing float, is the kind of supply dynamic that has moved tokens before. The bank is effectively arguing the mechanism converts stablecoin growth into token value with little leakage.
Where the yield comes from
USDe today generates yield mostly through delta-neutral basis trades, holding spot crypto while shorting perpetual futures to capture funding rates. That income stream depends on crypto market conditions, and funding rates can go negative for stretches, squeezing the spread. When funding turns negative, short positions pay rather than receive, and the yield backing USDe shrinks or disappears for weeks at a time.
Standard Chartered’s growth forecast assumes Ethena broadens beyond that base. The bank expects the tokenized asset market to expand from roughly $350 billion today to $4 trillion by the end of 2028, and sees that pool as a source of yield Ethena can plug into. Tokenized treasuries and money market funds would offer returns that do not depend on funding rates staying positive.
Ethena has already moved in that direction. The protocol announced a partnership with Binance to extend the basis trade backing USDe into tokenized equity markets, and separately said it would activate the fee switch once the $7.5 billion threshold is met.
The numbers behind the target
The $2 target implies ENA outperforms both major crypto assets on the bank’s own forecasts. Standard Chartered separately expects Bitcoin to reach $300,000 and Ether $18,000 by the end of 2028, roughly 3.6x and 6.7x from current levels. ENA at $2 would be closer to a sevenfold move, which the bank justifies through the buyback mechanics rather than general market beta.
The bank’s stablecoin market forecast sits at $2 trillion by end-2028. USDe at $40 billion would be a 2% share of that market, a figure the research team treats as achievable given Ethena’s current position among the largest synthetic dollar protocols.
For context, USDe has recovered from a difficult stretch. The token’s supply fell during market stress earlier in the year, and critics have long argued the basis trade backing it is cyclical rather than durable. The bank’s note is an answer to that critique: more yield sources, less dependence on funding rates, and a buyback that grows with supply.
What could break the thesis
The obvious risks are the ones the bank itself lists. USDe supply growth is not guaranteed, and the fee switch stays off until $7.5 billion, so the buyback story is dormant until then. Regulatory action against yield-bearing stablecoin structures in the US or Europe could cut off parts of the addressable market. MiCA in Europe already draws a hard line around interest-bearing token structures, and US stablecoin legislation has been moving toward payment-only frameworks that leave yield products in a gray zone.
There is also execution risk in the expansion itself. Plugging USDe into tokenized asset yield means new integrations, new counterparty exposures, and new regulatory questions in each jurisdiction. None of that is automatic, and each new yield source brings its own custody and settlement arrangements.
Competition is another factor. The $2 trillion stablecoin market the bank forecasts will not be empty ground. Ethena would be scaling against established fiat-backed issuers and against other synthetic dollar designs, all chasing the same treasury and payments flows.
Standard Chartered has been one of the more bullish traditional banks on digital assets, with prior forecasts for Bitcoin well above spot. This note extends that stance into decentralized finance, and it lands as Ethena prepares the fee switch activation that would make the buyback story concrete rather than theoretical.
Traders will watch two numbers: USDe supply crossing $7.5 billion, which flips the switch on, and the pace of supply growth after activation. Both are public on-chain figures, so the thesis gets tested in real time. If supply stalls below the threshold, the buyback mechanism stays dormant and the $2 target loses its main support.