Normal 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 beneath the brand new administration might 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 worldwide digital belongings, Geoffrey Kendrick, recognized a number of key components that would affect this development trajectory.
Repealing stifling guidelines
Normal Chartered anticipates that the administration’s early strikes might embrace repealing SEC steerage often called SAB 121. This steerage has required crypto custodians to listing digital belongings as stability sheet liabilities, limiting their skill to supply custodial companies.
Kendrick argued that eliminating SAB 121 might open doorways for U.S. banks and institutional buyers, permitting them to have interaction extra freely within the digital asset market.
Stablecoins, which have emerged as an more and more vital a part of the digital asset ecosystem, may additionally see vital advantages. The report highlighted latest legislative efforts to determine guardrails round stablecoin issuance, noting {that a} Republican-led administration might push these initiatives ahead.
Normal Chartered sees this as a vital step for legitimizing the usage of stablecoins in conventional finance functions, corresponding 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 anticipated to stay a central asset within the digital house, with its value anticipated to rise to round $200,000 by 2025, pushed by a mix of regulatory readability and continued institutional inflows.
For the reason that approval of the US spot Bitcoin ETFs earlier this yr, internet inflows have reached roughly 400,000 BTC, or round $25 billion.
Normal 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 functions and DeFi protocols, will achieve worth at a quicker fee than Bitcoin over the approaching years.
The sector presently represents roughly 25% of the overall 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 functions.
In line with the lender, Ethereum (ETH) and Solana (SOL) are notably well-positioned to seize this development, with Ethereum doubtlessly reaching $10,000 by the identical timeline.
Prolonged ‘Crypto Summer’
The report additional outlined development potential in rising sectors corresponding to DeFi and decentralized bodily infrastructure networks (DePin), predicting that DeFi might improve its share of the market to round $700 billion by 2026 as regulatory limitations are eliminated.
Moreover, classes like gaming, tokenization, and consumer-focused decentralized social networks are projected to increase, contributing to an “other” class that would attain a market cap of $1.5 trillion by 2026.
Total, Normal Chartered’s outlook highlights the potential for a wide-ranging “crypto summer” interval, marked by each elevated valuations for present belongings and the emergence of latest sub-sectors.
The financial institution attributes this anticipated development to a mix of favorable coverage modifications, rising institutional curiosity, and the maturation of varied blockchain use circumstances.
If the expected regulatory surroundings materializes, Normal Chartered sees digital belongings positioned for a big rise in mainstream adoption and market capitalization over the following two years.
