Summary
Jeff Kendrick, Global Head of Digital Asset Research at Standard Chartered, discusses bold crypto predictions including Bitcoin reaching $500K by 2028 and the death of the four-year cycle. He outlines a structural shift driven by ETF inflows, stablecoin adoption, and tokenized real-world assets totaling $4 trillion by 2028.
Key Price Predictions
| Asset | Target Price | Timeframe | Rationale |
|---|
| Bitcoin | $200K | End 2025 (adjusted down) | ETF inflows; portfolio rebalancing vs gold; macro headwinds make 200K difficult |
| Bitcoin | $500K | End 2028 | Institutional flows; optimal portfolio allocation suggests 20% BTC vs 80% gold |
| Ethereum | $25K | End 2028 | Tokenized asset adoption; DeFi growth; likely "too low" per Kendrick |
| Stablecoins | $2T market cap | End 2028 | Emerging market savings; corporate treasury adoption; TradFi migration |
| Tokenized RWAs | $2T on-chain | End 2028 | Money market funds ($750B); equities ($750B); commodities/other |
Market Analysis
Current State
- Bitcoin trading around $108K; support at 50-week moving average ($102-103K).
- ETF inflows reached $60 billion since start of 2024—best ETF launch in history.
- Previous record was QQQ with $8 billion in first year; Bitcoin ETFs achieved $60 billion in under two years.
- Current institutional/retail mix: 20/80, opposite of traditional asset classes.
Four-Year Cycle Thesis
- Kendrick believes the traditional four-year halving cycle is dead.
- October 2024 all-time high coincidentally aligned with historical 18-month post-halving peak.
- ETF inflows and institutional adoption create new structural demand dynamics.
- Institutional buyers (pensions, endowments) take 8-14 quarters to allocate; currently only seven quarters into adoption.
Macro Factors
- Fed Chair Powell indicated December rate cut not guaranteed; market had priced 90% probability.
- US-China trade tensions create short-term volatility; Bitcoin correlates with NASDAQ during risk-off events.
- Bitcoin serves dual role: hedge against TradFi issues and technology growth asset.
- Sharp ratio analysis shows Bitcoin outperforms MAG7 stocks with lower volatility over seven-year period.
Stablecoin Market Dynamics
Current State and Growth Drivers
- Current stablecoin market cap: approximately $300 billion.
- Two-thirds ($200 billion) represents emerging market savings escaping political/economic instability.
- Tether holds $135 billion in US Treasuries—17th largest holder globally, recently surpassed South Korea.
- Stablecoins enable 24/7 near-instantaneous payments globally at near-zero cost.
Treasury Market Implications
- Stablecoin growth creates massive new T-bill buyer supporting US debt issuance.
- Over $1 trillion in new Treasury demand by 2028 from stablecoin backing requirements.
- Enables Treasury to issue more front-end bills, reducing long-end supply and lowering yields.
- Lower back-end yields could impact mortgage rates ahead of 2026 midterm elections.
- Extends dollar hegemony by shifting from 67% dollar-denominated payments to 90%+ in digital rails.
Corporate Adoption
- Fortune 500 manufacturers and distributors exploring stablecoin use for capital efficiency.
- Current payment rails require cash stockpiles in each country due to 2-week settlement times.
- Stablecoins eliminate need for distributed cash reserves; companies can operate with smaller capital base.
- Expected winners: manufacturing, commodity, distribution companies in Midwest/South regions.
- Expected losers: traditional banks losing payment and FX market share.
DeFi and Tokenization
Tokenized Real-World Assets
- Current on-chain RWA market: $35 billion.
- Money market fund migration: US has $7.5 trillion off-chain; 10% on-chain equals $750 billion.
- Equity tokenization: US listed equity market $62 trillion; small percentage on-chain reaches $750 billion.
- BlackRock's BUIDL fund launched 100% on Ethereum; gradual expansion to other chains over time.
DeFi Protocol Impact
- Ave and Compound seeing $500 million-$1 billion daily in new stablecoin borrowing.
- Stablecoins provide liquidity, users, knowledge, and lending/borrowing infrastructure.
- 24/7 markets enable weekend trading of tokenized equities and other assets.
- DeFi protocols positioned to capture value as real-world assets migrate on-chain.
Ethereum Dominance
- TradFi institutions favor Ethereum due to 10-year track record and compliance comfort.
- Ethereum offers "Betamax to Blu-ray" upgrade over legacy rails—significant enough for TradFi adoption.
- Faster chains like Solana may capture tokenized equities later but Ethereum leads near-term.
- Ethereum's proof-of-stake provides ~3% staking yield unavailable in US ETFs.
Digital Asset Treasury Companies (DATs)
Bit Mine vs MicroStrategy
- Bit Mine (Tom Lee's company) acquiring Ethereum at 2-3x MicroStrategy's fastest Bitcoin buying pace.
- Target: 5% of circulating Ethereum supply within six months.
- Bit Mine captures 100% staking yield (~3% annually); ETFs cannot due to SEC concerns.
- Tom Lee estimates staking yield adds 0.6x to net asset value (MNAV).
MNAV Dynamics
- Current Bit Mine MNAV: approximately 1.3-1.4x.
- MicroStrategy MNAV: approximately 1.2x (peaked at 3x post-Trump election).
- Sustainable MNAV above 1.0x enables perpetual buying cycle—converting $1 into $1.50+ market value.
- Bit Mine target MNAV: 1.6-1.7x including staking premium.
Risks and Challenges
Near-Term (Through Year-End)
- Macro risk: Fed policy uncertainty; December rate cut odds dropped from 90% to 50/50.
- US-China trade tensions create correlation with NASDAQ during risk-off periods.
- Support level: 50-week moving average at $102-103K; potential dip to $105K near-term.
Medium-Term (2025-2026)
- Regulatory clarity delayed by US government closure; Clarity Act timeline pushed back.
- Midterm elections in November 2026 create political deadline for crypto-friendly legislation.
- SEC guidelines may provide sufficient clarity even without comprehensive legislation.
- Headline risk from potential protocol failures during volatile periods (though recent stress tests positive).
Positive Regulatory Developments
- Mike Celig appointed to CFTC—strongly pro-crypto and focused on SEC coordination.
- Chairman Atkins replacing Gary Gensler at SEC; shift from "everything is a security" approach.
- Fed Governor Waller described as highly bullish on stablecoins; advocating for four years.
- Anticipated comprehensive futures products for altcoins enabling institutional hedging and basis trading.
Future Developments
AI Agent Economy
- AI agents will require bank accounts—natural fit for stablecoins and crypto rails.
- X42 protocol enables micro-payments between agents for machine-to-machine transactions.
- WorldCoin's proof-of-humanity solutions enable zero-knowledge proofs for individuals and corporates.
- ZK proofs solve KYC/AML challenges through whitelisted individuals and corporates.
- Combination of on-chain liquidity and AI agents unlocks capital efficiency for individuals and corporates.
Investment Strategy
- Ave and Uniswap identified as primary DeFi protocol beneficiaries.
- 2026 outlook: altcoin cycle shifts to "pick the winners" rather than broad sector gains.
- Bitcoin and Ethereum remain core holdings; focus shifts to top 10-20 market cap protocols.
- Fundamentals matter more than previous cycles—protocols capturing real value flows outperform.
Action Items
- None specified in discussion; podcast focused on market analysis and predictions.
Open Questions
- Will December Fed rate cut materialize given mixed economic signals?
- How quickly will Clarity Act or SEC guidelines provide regulatory certainty?
- What percentage of US equity markets will tokenize beyond initial estimates?
- Which specific protocols beyond Ave/Uniswap will capture tokenization value?
- How will traditional banks respond to stablecoin-driven payment disruption?