Standard Chartered issued a highly positive report on the future prospects of the cryptocurrency industry, predicting that the market for digital assets will expand nearly fourfold to reach a market capitalization of $10 trillion by the end of 2026.
“We anticipate that the next two years will witness similar price gains for digital assets (in terms of percentage) as seen in 2021,” stated the British bank in a note shared with Decrypt. “Just like in 2021, existing digital assets are likely to experience price increases, and new subsectors will emerge. This time, real-world use cases are expected to become mainstream.”
The bank reaffirmed its previous forecasts that Bitcoin will reach $200,000 and Ethereum will surpass $10,000 by the end of next year. These projections represent a significant jump from the current prices of approximately $76,500 and $2,950, respectively.
Much of this optimism stems from Donald Trump’s decisive victory in the recent U.S. presidential election. Trump, who made numerous commitments related to cryptocurrencies during his campaign, is increasingly likely to reclaim the White House with Republican majorities in both the Senate and the House.
Standard Chartered expects that Trump and his congressional allies will swiftly implement several measures that will have a positive impact on the prices of various cryptocurrencies. These measures include the repeal of SAB 121, which discourages banks from holding cryptocurrencies in custody, the enactment of stablecoin legislation, the complete dissolution of the U.S. Securities and Exchange Commission’s (SEC) crackdown on cryptocurrencies, and the possibility of Trump establishing a strategic Bitcoin reserve for the U.S. government. However, the bank believes that the likelihood of such a plan is low, despite the enthusiasm among certain Republicans and industry participants.
“The new U.S. administration is expected to introduce regulatory changes that are necessary to drive the next phase of growth in digital assets,” stated Standard Chartered.
The bank also anticipates that other developments will shape the cryptocurrency ecosystem in the next two years. It predicts that despite Bitcoin’s soaring price, the dominance of the top cryptocurrency in the digital assets sector will decrease from its current valuation of 60% to just 40% by the end of 2026.
According to Standard Chartered, this surge in the value of alternative cryptocurrencies, or altcoins, will be driven by the rise of real-world applications for utility-based crypto tokens.
“Digital assets that are more closely linked to practical uses are likely to benefit the most,” wrote the bank. “In particular, we expect Solana to outperform both BTC and ETH.”
Standard Chartered is confident that several use cases will drive this trend for altcoins in the near future, including growth in gaming, decentralized physical infrastructure (DePIN), and on-chain consumer social products.
Edited by Andrew Hayward.