Standard Chartered Bank recently released a report projecting significant growth in the crypto market cap, expecting it to reach $10 trillion by the end of 2026. The bank believes that the recent Republican win in the US elections could act as a catalyst for this growth, potentially increasing the combined market cap of digital assets from $2.5 trillion to $10 trillion.
Geoffrey Kendrick, the head of global digital assets at Standard Chartered, outlined several key factors that could contribute to this growth. One important factor is the potential repeal of SEC guidance known as SAB 121, which has limited the ability of crypto custodians to offer services by listing digital assets as balance sheet liabilities. Kendrick believes that removing this guidance could allow US banks and institutional investors to participate more freely in the digital asset market.
The report also highlights the importance of stablecoins in the digital asset ecosystem. Standard Chartered anticipates that recent legislative efforts to regulate stablecoin issuance could lead to increased legitimacy and growth in the stablecoin market, potentially reaching $1 trillion by 2026.
Bitcoin is expected to continue its growth, with its price projected to reach $200,000 by 2025. The approval of US spot Bitcoin ETFs earlier this year has already led to significant inflows into the market, with around 400,000 BTC or $25 billion invested. Standard Chartered believes that as the ETF market matures, these inflows could increase even further, leading to a more balanced allocation between Bitcoin and gold in investment portfolios.
In addition to Bitcoin, the report highlights the potential growth of smart contract platforms and layer 2 blockchains, which facilitate decentralized applications and DeFi protocols. These platforms are expected to grow at a faster rate than Bitcoin, with the total market cap reaching $2.5 trillion by 2025. Ethereum and Solana are specifically mentioned as well-positioned to capture this growth, with Ethereum potentially reaching $10,000 by the same timeline.
The report also mentions the growth potential in emerging sectors such as DeFi and decentralized physical infrastructure networks (DePin). DeFi, in particular, is projected to increase its market share to around $700 billion by 2026 as regulatory barriers are removed. Other categories such as gaming, tokenization, and consumer-focused decentralized social networks are also expected to expand, contributing to a total market cap of $1.5 trillion by 2026.
Overall, Standard Chartered’s report paints a picture of a “crypto summer” period characterized by increased valuations for existing assets and the emergence of new sub-sectors within the digital asset market. The bank attributes this anticipated growth to a combination of favorable policy changes, rising institutional interest, and the maturation of various blockchain use cases. If these predictions come to fruition, digital assets could see a significant rise in mainstream adoption and market capitalization in the coming years.
