A compacted binary tree is a directed acyclic graph encoding a binary tree in which common subtrees are factored and shared, such that they are represented only once. We show that the number of compacted binary trees of size $n$ grows asymptotically like $$Θ\left( n! \, 4^n e^{3a_1n^{1/3}} n^{3/4} \right),$$ where $a_1\approx-2.338$ is the largest root of the Airy function. Our method involves a new two parameter recurrence which yields an algorithm of quadratic arithmetic complexity. We use empirical methods to estimate the values of all terms defined by the recurrence, then we prove by induction that these estimates are sufficiently accurate for large $n$ to determine the asymptotic form. Our results also lead to new bounds on the number of minimal finite automata recognizing a finite language on a binary alphabet. As a consequence, these also exhibit a stretched exponential.