Standard Chartered said the recent Republican victory in the US election could serve as a major catalyst for digital assets, potentially boosting their combined market capitalization from $2.5 trillion to $10 trillion by the end of 2026.
The bank’s latest report outlines how anticipated regulatory changes under the new administration could pave the way for widespread adoption of digital assets, as policy changes and regulatory rollbacks favor a more favorable landscape.
Geoffrey Kendrick, Head of Global Digital Assets at StanChart, identified several key factors likely to influence this growth trajectory.
Repeal stifling rules
Standard Chartered predicts that the administration’s first actions could include repealing SEC guidance known as SAB 121. These guidance required cryptocurrency custodians to list digital assets as balance sheet liabilities, limiting thus their ability to offer childcare services.
Kendrick argued that eliminating SAB 121 could open doors for U.S. banks and institutional investors, allowing them to engage more freely in the digital asset market.
Stablecoins, which have become an increasingly important part of the digital asset ecosystem, could also benefit from significant advantages. The report highlights recent legislative efforts to establish guardrails around the issuance of stablecoins, noting that a Republican-led administration could advance these initiatives.
Standard Chartered sees this as a crucial step in legitimizing the use of stablecoins in traditional financial applications, such as cross-border transactions and USD savings, potentially increasing the market capitalization of stablecoins to $1 trillion here 2026.
Bitcoin’s $200,000 trajectory
Bitcoin (BTC) is expected to remain a central asset in the digital space, with its price expected to reach around $200,000 by 2025, thanks to a combination of regulatory clarity and continued institutional inflows.
Since the approval of spot Bitcoin ETFs in the United States earlier this year, net inflows have reached around 400,000 BTC, or around $25 billion.
Standard Chartered believes these flows could further accelerate as the ETF market matures, potentially optimizing investment portfolios with a more balanced allocation between Bitcoin and gold, according to the lender.
Beyond Bitcoin, the report predicts that smart contract platforms and layer 2 blockchains, which facilitate decentralized applications and DeFi protocols, will gain value at a faster rate than Bitcoin in the coming years.
The sector currently represents around 25% of the total market capitalization of digital assets and has the potential to grow to $2.5 trillion by 2025 as these platforms benefit from an increasing range of end-use applications.
According to the lender, Ethereum (ETH) and Solana (SOL) are uniquely positioned to capture this growth, with Ethereum potentially reaching $10,000 in the same time frame.
“Crypto Summer” expanded
The report further highlights the growth potential in emerging sectors such as DeFi and decentralized physical infrastructure networks (DePin), predicting that DeFi could increase its market share to around $700 billion by 2026 as regulatory barriers will be removed.
Additionally, categories such as gaming, tokenization, and consumer-focused decentralized social networks are expected to grow, contributing to an “other” category that could reach a market cap of $1.5 trillion by 2026.
Overall, Standard Chartered’s outlook highlights the potential for a far-reaching “crypto summer” period, marked by both rising valuations of existing assets and the emergence of new sub-sectors .
The bank attributes this anticipated growth to a combination of favorable policy changes, growing institutional interest, and the maturation of various blockchain use cases.
If the anticipated regulatory environment materializes, Standard Chartered believes that digital assets will be positioned for a significant increase in mainstream adoption and market capitalization over the next two years.
