Standard Chartered issued an extremely optimistic note on the near-term outlook for the crypto industry on Friday, estimating that the digital asset market is poised to quadruple to a market capitalization of $10 trillion by the end of 2026.
“We expect that over the next two years, digital asset prices will increase by the same amount (in percentage terms) as in 2021,” the British bank said in a note shared with Decrypt. “As in 2021, existing digital assets will likely see their prices rise and new sub-sectors emerge; this time, real-world use cases are finally about to go mainstream.
The bank doubled down on its previous estimates that by the end of next year, Bitcoin would reach $200,000 and Ethereum would surpass $10,000. That’s a sizable jump from current prices of around $76,500 and $2,950, respectively.
Much of this enthusiasm comes from Donald Trump’s decisive victory in Tuesday’s US presidential election. Trump, who listed a long list of crypto issues commitments in the electoral campaign this year, seems more and more likely to retake the White House armed with Republican majorities in the Senate and the House.
Standard Chartered expects Trump and his congressional allies to quickly implement a number of measures that will trigger positive price action for many cryptocurrencies.
Among them are the repeal of SAB 121which discourages banks from holding cryptocurrencies; the passage of stablecoin legislation; a complete dissolution of the United States Securities and Exchange Commission (SEC) crypto crackdown; and the possibility of Trump creating a strategic American government Bitcoin Reserve– although Standard Chartered believes there is a “low probability” of such a plan, despite enthusiasm from some Republicans and industry members.
“The new US administration will likely make the regulatory changes needed to drive the next stage of growth in digital assets,” Standard Chartered said.
The bank also expects other new developments to define the crypto ecosystem over the next two years. On the one hand, it indicates that despite the surge in Bitcoin prices, the world’s leading cryptocurrency is on the verge of losing its dominance in the digital asset sector, falling from its current valuation to 60% of the whole of the crypto industry to just 40% by the end of 2026.
According to Standard Chartered, this explosion in altcoin value will be driven by the rise of real-world applications for utility-packed crypto tokens.
“Digital assets with greater end-use exposure are likely to benefit more,” the bank wrote. “In particular, we expect Solana to outperform both BTC and ETH.”
Standard Chartered is betting that several use cases are poised to drive this trend for altcoins in the immediate future, including gaming growth, decentralized physical infrastructure (or DEPIN) and social chain consumer products.
Edited by Andrew Hayward
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