Ethena Buybacks Could Shape the Path Toward the $2 ENA Target

Standard Chartered has launched coverage of Ethena’s ENA token with a $2 price target, compared with a $0.28 reference price. The target implies a nearly sevenfold increase and is based largely on expectations for rapid growth in Ethena’s USDe stablecoin and the resulting expansion of protocol revenue.

The bank projects USDe supply will rise eightfold to $40 billion by the end of 2028. It also expects USDe to grow slightly faster than the broader stablecoin market and forecasts ENA to outperform Bitcoin and Ether over the same period. These are forward-looking estimates rather than guaranteed outcomes.

At the heart of the valuation is Ethena’s ability to turn expanding USDe usage and diversified yield strategies into recurring revenue and token buybacks.

Ethena Broadens Its Revenue Strategy

Ethena initially generated much of its yield through crypto basis trades. As returns from that strategy have declined, the protocol has expanded into DeFi, institutional lending and basis trades connected to equities and commodities.

Standard Chartered estimates the combined yield from these activities at 5.2%. While diversification gives Ethena more potential sources of income, those returns can still vary with market conditions.

The bank also expects the tokenized-asset market to expand from $350 billion to $4 trillion by 2028. For Ethena, capturing a sufficient portion of that growth could be important to maintaining revenue as its business expands.

Ethena’s governance-approved fee switch adds another part to the valuation equation. Once USDe reaches designated supply milestones, 95% of net revenue from certain business lines is directed toward ENA buybacks.

Ethena estimates that USDe reaching $25 billion could generate roughly $375 million in annual buybacks under its stated assumptions. At $40 billion of USDe supply, Standard Chartered calculates that buybacks could represent around 23% of ENA’s market capitalization if the token price stayed unchanged.

The bank views that ratio as too high to persist and therefore expects ENA’s market value to increase as the protocol grows. A higher ENA price would reduce buybacks relative to market capitalization. Standard Chartered points to Uniswap’s roughly 3%-4% annual buyback rate as a longer-term reference.

This means the $2 target relies on more than the size of future buybacks. The model assumes USDe expands, revenue increases and ENA’s valuation rises alongside that growth. If the token price remained flat while buybacks expanded sharply, the resulting buyback-to-market-capitalization ratio would become unusually large.

Risks to the ENA Projection

The forecast remains sensitive to Ethena’s ability to maintain its revenue-generating strategies. Lower basis-trade returns, weaker market activity or slower adoption of newer yield sources could reduce the funds available for buybacks.

Regulatory developments could also affect how stablecoins and yield-bearing dollar products are distributed and used, potentially influencing Ethena’s growth trajectory.

As of Sept. 30, ENA was around $0.27 with a market capitalization near $2.65 billion. The token had gained approximately 28% over the previous week and 77% over the previous month.

The $2 forecast therefore represents a long-term scenario built around USDe reaching $40 billion, broader yield diversification and substantial revenue-funded buybacks. Whether those assumptions materialize will determine how closely ENA’s future valuation follows the bank’s projection.