Customary Chartered mentioned the latest Republican win within the US elections might function a significant catalyst for digital belongings, doubtlessly driving their mixed market cap from $2.5 trillion to $10 trillion by the top of 2026.
The financial institution’s newest report outlines how anticipated regulatory shifts underneath the brand new administration could pave the way in which for mainstream adoption of digital belongings as coverage modifications and regulatory rollbacks foster a extra favorable panorama.
StanChart’s head of world digital belongings, Geoffrey Kendrick, recognized a number of key components that might affect this progress trajectory.
Repealing stifling guidelines
Customary Chartered anticipates that the administration’s early strikes might embrace repealing SEC steering often known as SAB 121. This steering has required crypto custodians to listing digital belongings as steadiness sheet liabilities, limiting their means to supply custodial companies.
Kendrick argued that eliminating SAB 121 might open doorways for U.S. banks and institutional traders, permitting them to interact extra freely within the digital asset market.
Stablecoins, which have emerged as an more and more necessary a part of the digital asset ecosystem, may additionally see important advantages. The report highlighted latest legislative efforts to determine guardrails round stablecoin issuance, noting {that a} Republican-led administration might push these initiatives ahead.
Customary Chartered sees this as a crucial step for legitimizing the usage of stablecoins in conventional finance purposes, equivalent to cross-border transactions and USD financial savings, doubtlessly rising the stablecoin market cap to $1 trillion by 2026.
Bitcoin’s $200,000 trajectory
Bitcoin (BTC) is predicted to stay a central asset within the digital house, with its worth anticipated to rise to round $200,000 by 2025, pushed by a mixture of regulatory readability and continued institutional inflows.
For the reason that approval of the US spot Bitcoin ETFs earlier this yr, web inflows have reached roughly 400,000 BTC, or round $25 billion.
Customary Chartered believes these inflows might speed up additional because the ETF market matures, doubtlessly optimizing funding portfolios with a extra balanced allocation between Bitcoin and gold, based on the lender.
Past Bitcoin, the report projected that sensible contract platforms and layer 2 blockchains, which facilitate decentralized purposes and DeFi protocols, will achieve worth at a quicker fee than Bitcoin over the approaching years.
The sector at the moment represents roughly 25% of the full digital belongings market cap and has the potential to develop to $2.5 trillion by 2025 as these platforms profit from an increasing array of end-use purposes.
In accordance with the lender, Ethereum (ETH) and Solana (SOL) are significantly well-positioned to seize this progress, with Ethereum doubtlessly reaching $10,000 by the identical timeline.
Prolonged ‘Crypto Summer season’
The report additional outlined progress potential in rising sectors equivalent to DeFi and decentralized bodily infrastructure networks (DePin), predicting that DeFi might enhance its share of the market to round $700 billion by 2026 as regulatory boundaries are eliminated.
Moreover, classes like gaming, tokenization, and consumer-focused decentralized social networks are projected to develop, contributing to an “different” class that might attain a market cap of $1.5 trillion by 2026.
Total, Customary Chartered’s outlook highlights the potential for a wide-ranging “crypto summer season” interval, marked by each elevated valuations for present belongings and the emergence of recent sub-sectors.
The financial institution attributes this anticipated progress to a mixture of favorable coverage modifications, rising institutional curiosity, and the maturation of assorted blockchain use instances.
If the anticipated regulatory setting materializes, Customary Chartered sees digital belongings positioned for a big rise in mainstream adoption and market capitalization over the following two years.