Standard Chartered has initiated coverage of Ethena’s ENA token with a year-end 2028 price target of $2, up from its current level of approximately $0.28. The bank forecasts the token will reach $0.42 by the end of 2026 and $1.10 in 2027 before accelerating further, potentially outperforming expected gains for both Bitcoin and Ethereum over the same period.
However, achieving this projection requires Ethena to reverse a contraction that has reduced its USDe synthetic-dollar supply significantly from its peak, and expand far beyond any scale it has previously reached. USDe supply peaked above $10 billion after its late 2023 launch by combining long spot crypto positions with short perpetual futures to capture funding payments. As crypto funding rates compressed and the trade grew crowded, USDe supply fell to about $4.9 billion, with Standard Chartered estimating the current blended yield at around 5.2%.
Standard Chartered’s bullish forecast assumes that USDe supply will recover and reach $40 billion by 2028. This means Ethena must regain its previous $10 billion peak and then quadruple that figure.
To support this growth without relying solely on crypto derivatives, Ethena has broadened its yield generation to include DeFi lending, institutional lending, liquid stablecoins, real-world assets, and basis trades tied to equities and commodities. The protocol is also expanding into white-label stablecoins and Ethena Pay.
A critical near-term hurdle is the protocol's fee-switch framework, which begins at $7.5 billion of USDe supply. Once crossed, the valuation model relies on directing a large portion of qualifying net revenue toward ENA token buybacks. Under an approved framework, 95% of qualifying net revenue paid to the Ethena Foundation is allocated toward ENA buybacks.
Standard Chartered estimates that if USDe reaches $40 billion, annual buybacks could represent roughly 23% of the token's current market value if the price remained unchanged. The bank expects investors to price in these expected purchases, pushing the token higher and reducing the annual buyback percentage, citing Uniswap as a market analog.
Despite the projections, the strategy presents a balancing act. Capturing a larger share of revenue for the protocol can reduce the yields available to sUSDe holders, requiring Ethena to maintain competitive payouts to attract the deposits necessary for continued growth.
