Ethena Buyback Math Puts $2 ENA Price Target Under Pressure

Standard Chartered expects Ethena’s USDe supply to expand eightfold to $40 billion by the end of 2028 and has started coverage of ENA with a $2 price target. That target is roughly seven times the $0.28 reference price cited in the report.

The forecast raises a valuation question before the price target itself: can Ethena scale diversified yield sources and token buybacks quickly enough to support such a large repricing?

The bank projects USDe growing slightly faster than the overall stablecoin market and expects ENA to outperform Bitcoin and Ether through 2028. These figures are projections rather than guaranteed returns, and the thesis depends on Ethena increasing revenue and channeling enough of that income toward demand for ENA.

How Diversified Yield Supports the $2 Buyback Thesis

Ethena initially relied heavily on the crypto basis trade to generate yield. As those returns have weakened, the protocol has expanded into DeFi, institutional lending and basis strategies involving equities and commodities. Standard Chartered estimates that these sources currently generate a blended yield of 5.2%.

Diversifying the yield strategy expands the pool of assets that can generate income, but it does not make Ethena’s revenue completely independent of market conditions. Standard Chartered forecasts the tokenized-asset market will increase from $350 billion to $4 trillion by 2028, although Ethena would still need to capture enough of that expansion to translate broader market growth into recurring revenue.

Ethena governance has approved a fee switch that sends 95% of net revenue from certain business lines toward ENA buybacks after USDe reaches specified supply milestones. Under certain assumptions, Ethena estimates that reaching $25 billion in USDe supply could generate $375 million in annual buybacks. That figure depends on both achieving the supply milestone and maintaining the required revenue levels.

At $40 billion of USDe supply, Standard Chartered estimates that buybacks could equal roughly 23% of ENA’s market capitalization if the token price remained unchanged. The bank considers that level unsustainable and expects ENA’s price to increase, which would reduce buybacks as a percentage of market value. It compares the eventual ratio with Uniswap’s annual buyback rate of approximately 3% to 4%.

The bank’s flat-price scenario illustrates why the $2 target cannot be reduced to a simple buyback calculation. If ENA remained at the same price while USDe expanded, projected repurchases would become extremely large relative to the token’s circulating market value. Standard Chartered’s forecast instead assumes that ENA appreciates as the protocol grows, bringing the buyback-to-market-cap ratio back toward a more normalized level. That represents a valuation scenario rather than proof that market demand will absorb the resulting supply or maintain the projected multiple.

Market conditions remain another variable for Ethena’s revenue outlook. Lower returns from basis strategies, reduced activity in relevant markets or slower adoption of newer yield sources could decrease the income available for buybacks. These represent risks to the forecast assumptions rather than outcomes established by the report.

Regulation could also influence the economics of stablecoins and yield-generating dollar products. Changes in policy may affect how these products are distributed and demanded without necessarily altering Standard Chartered’s stated ENA price target.

Standard Chartered’s September 30 market snapshot valued ENA at around $0.27, with a market capitalization of approximately $2.65 billion. The report noted that the token had gained about 28% over the previous week and 77% over the previous month. Those figures reflect the market conditions at that time, while $0.28 is the separate reference price used to compare with the bank’s $2 target.

The near-term story therefore combines strong recent momentum with a longer-term fundamental projection. ENA’s performance depends in part on whether USDe expansion, diversified yield generation and buybacks develop together. If supply growth or net revenue falls short of expectations, the same assumptions could weaken. Standard Chartered’s $2 target ultimately depends on that sequence of execution rather than the headline multiple alone.

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