12 Major Institutions' Outlook for 2026: Where Is the Cryptocurrency Industry Heading?

Editor’s Note: This article is adapted from the Bankless program “12 Big Crypto Predictions for 2026,” hosted by Ryan Adams and David Hoffman. In this episode, the hosts did not provide a single “predictive answer,” but instead attempted to outline the overall landscape of the crypto industry in 2026 through a lateral comparison of predictions from top institutions such as Bitwise, Coinbase Institutional, Galaxy, Grayscale, CoinShares, a16z, and others.

Ryan: Merry Christmas, Bankless Nation! On this Christmas Eve, we decided to switch things up. Although there have been some industry movements this week, like AAVE’s “internal conflict” and Nick Carter warning about quantum computing threats to Bitcoin, today we want to talk about something bigger: the big crypto predictions for 2026. David, you’ve done an in-depth meta-analysis on this, right?

David: That’s right. I compiled predictions from top institutions like Bitwise, Coinbase Institutional, Galaxy, Grayscale, and others. I divided them into three categories: highly consensus predictions, major directions with some differences, and those with serious disagreements.

Ryan: Great, that saves us the time of reading dozens of reports. Let’s get straight to the point—what are the predictions that everyone seems to agree on?

Highly Consensus Predictions

David: Well, before diving into specific forecasts, we need to talk about stablecoins. Regardless of others’ opinions, I can confidently say that next year will be the “Year of Stablecoins,” which is almost universally agreed upon. And we should thank the M0 folks—they’ve developed interesting on-chain stablecoin architectures that separate currency issuance from reserve verification.

Ryan: Exactly. The stablecoin market is too fragmented now; USDC and USDT are like isolated islands. M0’s approach aims to break this situation. If the consensus for next year is that stablecoins will continue to expand, M0’s position will be very advantageous.

Stablecoins Becoming a True Payment Infrastructure

David: Let’s look at the first “highly consensus” prediction—stablecoins will evolve from mere infrastructure to a true payment rail.

Ryan: I agree. There have been signs of this already this year, but the infrastructure isn’t fully there yet. The consensus is that 2026 will be the year of explosive growth in payments. Galaxy even predicts stablecoin transaction volume will surpass ACH (the US Automated Clearing House).

David: Bitwise also has a sharp prediction: at least one emerging market currency will be devalued next year due to stablecoin usage, as people shift to using internet-based dollars.

Ryan: For ordinary users, the underlying mechanics are invisible. Using Coinbase Wallet to send money feels as fast as Venmo, but underneath it’s USDC. In the future, we might bypass Visa altogether, making transactions faster and cheaper.

David: Do you think traditional banks like Wells Fargo will adopt this? I still have to pay $25 in transfer fees—it’s crazy.

Ryan: I’m skeptical. They’re likely to be disrupted by more innovative competitors. The future might just be a simple “Transfer” button, with the backend running on stablecoins, and users won’t need to understand the details.

Asset Tokenization Moving Toward Scale

David: The second major trend is that asset tokenization will shift from “experimental pilots” to mass issuance and collateralization.

Ryan: Besides BlackRock’s BUIDL fund, which is already a real product, most others are still in pilot stages. But by 2026, Coinbase predicts the tokenized asset market could grow from $20 billion to $400 billion.

David: What benefits does this bring to native crypto users? 24/7 trading of US stocks? Or bringing these assets into DeFi lending?

Ryan: It might take a bit longer. Securities tokenization involves complex legal issues, making it hard to directly integrate into protocols like Aave. 2026 might be the infrastructure year, with 2027 seeing the explosion of securities tokens entering DeFi.

ETF Explosion

David: The third prediction is a massive ETF boom. Bitwise forecasts over 100 crypto-related ETFs will be listed in the US next year.

Ryan: Expect various altcoin ETFs and basket ETFs to emerge. Galaxy predicts Bitcoin ETF net inflows will exceed $50 billion. Most importantly, Bitcoin might be included in mainstream asset allocation models, like 401(k) plans.

Market Structure Legislation (Clarity Act)

David: I’m skeptical about this one, but Market Structure Legislation might pass in 2026.

Ryan: I’m 50/50 on that. Although Republicans are in power, 2026 is a midterm election year with intense political battles. Democrats might leverage Trump’s crypto dealings as bargaining chips.

Mainstream Prediction Markets

David: Fifth, prediction markets (like Polymarket) will become mainstream. Everyone expects Polymarket’s weekly trading volume to stabilize above $1-1.5 billion.

Ryan: This is more of a continuation trend; the 2020 election already proved prediction markets’ power.

Quantum Computing

David: Another hardcore topic—quantum computing threats. Predictors generally agree this will be a hot topic in 2026, but not an immediate threat.

Ryan: Nick Carter has already sounded the alarm. He believes Bitcoin’s slow upgrade process means if we don’t start addressing quantum threats now, it’ll be too late by 2030.

David: Exactly. Some in the Bitcoin community are too dogmatic—believing “Bitcoin is digital gold” and doesn’t need change. But it’s software, and software can be cracked by computing power. If Bitcoin refuses to upgrade, quantum computing could wipe it out.

Ryan: This rigidity is a narrative strength but also a weakness in the face of technological crises.

Uncertain Predictions

Hybrid Finance

David: Lastly, let’s talk about “Hybrid Finance.” CoinShares coined this term, essentially representing Wall Street’s approach to on-chain business logic.

Ryan: That means public chains as settlement and composability layers, while traditional finance provides regulation, distribution, and custody. This combination is inevitable because you can’t turn Apple’s stock into “unregistered assets”—what if North Korean hackers steal it? Would you let them sit on the board?

David: Haha, exactly. So, when traditional finance enters, smart contracts need a reversible, interventionist governance layer—not just “who owns what.” Interestingly, you can build centralized applications on decentralized layers, but not vice versa.

Ryan: That’s why crypto remains bullish. When two distrustful countries like China and the US exchange assets, the only thing they can trust is a decentralized settlement layer.

Privacy as a Core Competitive Edge

David: Privacy is also a consensus topic. Galaxy predicts privacy tokens will have a market cap over $100 billion by 2026. I can think of Monero and Zcash.

Ryan: Privacy tokens are performing strongly now, but I wonder: is privacy a feature or does it need a dedicated app chain? I could swap Solana for Zcash via a privacy protocol, then swap back—no need to hold Zcash long-term.

David: a16z’s view is deep—they believe privacy will be the most important “moat” in crypto. Whoever solves privacy can create chain-level lock-in because “secrets” are hard to cross-chain.

CEX to DEX Migration

David: Galaxy predicts that by the end of 2026, DEXs will account for over 25% of spot trading volume.

Ryan: That’s the trend. DEXs have much lower fees than CEXs, and if user experience keeps improving, traditional CEXs will struggle to maintain high margins. Even Coinbase is integrating various DEX protocols via its Base chain to “revolutionize itself.”

Tokenomics: Value Capture Returns to Reality

David: Everyone is basically saying the same thing: crypto protocols need to more clearly capture and reward value. The old “fat chain” theory thought value flowed mainly to the layer 1 chain; now it’s about “fat applications” where value stays at the application layer.

Ryan: But as an investor, that’s frustrating. In traditional finance, I buy Nvidia and own 100% of its value. In crypto, value is split among on-chain tokens, off-chain company equity, and different protocol layers. I just want to buy one asset that captures all value.

Huge Disagreements

While there is consensus on many points, two core areas are highly disputed: one is DATs (Digital Asset Trusts/Companies), and the other is market cycles.

Future of DATs (Digital Asset Trusts)

Ryan: What are the disagreements around DATs?

David: There are three very different scenarios. Coinbase is very optimistic, believing DATs will evolve into “DAT 2.0” models. Future DATs won’t just hold assets but will shift to trading, storage, and even acquiring “Sovereign Block Space.” They see block space as a core commodity of the digital economy.

Ryan: So, if you’re a DAT company, you need to learn how to sell block space?

David: Exactly. For example, an Ethereum DAT might stake to produce blocks and sell that block space. But Galaxy’s view is the opposite: they predict at least five digital asset companies will be forced to sell, be acquired, or shut down due to mismanagement.

Ryan: What about Grayscale?

David: Grayscale is the most extreme—they see DATs as a “red herring,” not an important factor in 2026.

Ryan: I actually think these views aren’t mutually exclusive. Maybe one or two successful DATs evolve into Coinbase’s 2.0 model, while others fail as Galaxy predicts. I agree with Grayscale that DATs are more of a “momentum tool” in bull markets, and in bear markets, they just lie dormant.

Market Cycles and Annual K-line

Ryan: Do we still follow the “four-year cycle” in the market?

David: There are two camps. Bitwise and Grayscale believe Bitcoin will break the four-year cycle and hit a new high in the first half of 2026. But Galaxy and Coinbase think 2026 will be very volatile, driven by macro factors, with prices hovering between $110,000 and $140,000.

Ryan: You recently wrote an article about “annual K-lines.” What do you see from the hexagrams?

David: Very interesting. Looking at Bitcoin’s annual K-line, it usually shows 2-3 green candles followed by 1 red candle. In 2025, we just experienced a very small red candle. There are two interpretations: either the red candle is too small, meaning the decline isn’t over, and 2026 will be red; or the red candle has completed its correction, and we’re ready for a new rally.

Ryan: I think it’s unlikely that 2026 will have a huge red candle or a super green one like early days.

David: I agree. My prediction is that 2026 might be a “baby green” or a slightly red candle with minor declines. Volatility could range from -15% to +50%.

Ethereum vs Bitcoin

Ethereum: The Tug of War Between Fundamentals and Valuation

David: After discussing the macro, let’s talk about these two major assets. From a network perspective, 2025 is actually a good year for Ethereum. The roadmap is clearer, ZK tech is starting to land, and its potential advantage in quantum resistance is more apparent than Bitcoin’s.

But the problem is, these developments aren’t reflected in ETH’s price.

Ryan: Right. As an asset, ETH’s performance in 2025 can be described as “poor.” Even institutions like Tom Lee bought about 3.5% of circulating supply in five months, but the price didn’t move much.

David: The real disagreement isn’t about fundamentals but about valuation models. If you treat ETH as a “fee-based software network” and use P/S ratios, the current on-chain fee income supports a price of about $39.

Ryan: But applying the same logic to Bitcoin, the situation is even more extreme—Bitcoin doesn’t even have “sales,” so it’s only worth around $10. The “revenue” is ultimately earned by miners, not the network itself.

David: That’s why there’s such a sharp split in ETH narratives. I saw a website that aggregates 12 different valuation models: the most conservative P/S model gives a price of $39; the most aggressive, based on Metcalfe’s Law—active addresses and settlement volume—suggests ETH could be worth up to $9,400.

Ryan: From $40 to nearly $10,000, that huge range indicates a valuation war in progress. I personally favor the Metcalfe perspective because I see ETH as a monetary asset similar to Bitcoin.

David: The bears who are negative on ETH insist only Bitcoin deserves the “currency” label; other chains are just application platforms and should be valued as companies or software.

Ryan: This narrative conflict will be amplified in bear markets. But I see ETH as a “trilemma asset”—it’s a smart contract platform, a settlement layer, and also competes for a currency premium.

David: In other words, for a blockchain to survive long-term, its core market cap must come from currency premium, not just fee revenue.

Ryan: Exactly. In a world of expanding block space, relying solely on fees can’t sustain a $100 billion L1 network. Whether Ethereum, Bitcoin, or Solana, they shouldn’t be valued just as “P/S assets.”

David: So, your conclusion is that ETH either becomes the widely accepted currency or drops back to the $30s?

Ryan: That’s about right. Its ultimate valuation depends on its dominance as a smart contract platform.

David: Just like in 2021, when Ethereum held over 90% market share, everyone valued it as a $9,000 “store of value currency”; but if that share shrinks, valuation shifts toward a “company model.”

David: I believe Ethereum’s market dominance has rebounded. Although Solana has performed well, it’s no longer experiencing explosive growth. Meanwhile, Ethereum is back in the spotlight with tokenization, stablecoins, and institutional access.

Ryan: Exactly. You can see this as a tug-of-war between “P/S” and “Metcalfe’s Law.” If Ethereum can leverage ZK tech and reduce block times (say, to 3 seconds), it could dominate technically, and its valuation could shift from a “company” to a “currency.”

David: Using TVL multiples, Ethereum should be worth around $4,000 now. The key issue is, the world is still debating how to value ETH, with ranges from $40 to $10,000. Such extreme valuation disagreements are rare in other asset classes.

Bitcoin: The Mild “Winter” and the Potential “Iceberg”

Ryan: Let’s talk about Bitcoin. It declined 6% in 2025.

David: Honestly, if this is the “bear market” we’re experiencing, it’s the mildest winter in history.

Ryan: True. The US government’s tightening policies this year hurt assets like Bitcoin that serve as “hedges against fiat devaluation,” so a 6% drop is normal. But we all know fiat currencies tend toward zero in the long run, and this tightening won’t last forever.

David: Bitcoin’s narrative in 2025 was very successful, with institutional faith reaching a record high. But I see an “iceberg” on the horizon—especially quantum computing. If prediction markets show increasing chances of quantum decryption, Bitcoin’s price will react early.

Ryan: I even think that if Bitcoin can’t effectively address quantum threats, it could actually be a big boon for Ethereum.

David: You mean Bitcoin falls, and Ethereum gets a boost?

Ryan: Short-term, a Bitcoin drop could cause a market shakeout. But in the medium to long term (a year or two), if investors see Ethereum proactively preparing for quantum security while Bitcoin doesn’t, smart money will flow into the safer platform. Bitcoin’s failure wouldn’t necessarily mean the end of crypto.

Two Visions

Ryan: Summing up this year, I see the crypto world split into two visions—you should allocate assets to both:

Vision 1: The United Chains of Ethereum. This is what Bankless has always supported. All functions—value storage, privacy (Aztec), trading (Layer 2 protocols)—are rooted in Ethereum as a neutral settlement layer. Here, ETH is the core asset, not Bitcoin.

Vision 2: Specialized Application Chains. Bitcoin as a “value storage” chain, Solana for “high-frequency execution,” Zcash for “privacy.” In this world, Bitcoin is the currency, and all other chains must prove their value through real revenue.

David: It feels like a yin-yang game. Ethereum pursues order, aiming to connect all chains and achieve interoperability; the other vision is chaos—chains operating independently, with centralized exchanges as the only coordinators.

Ryan: This competition will continue into 2026 and beyond.

David: That’s our forecast. Happy holidays everyone!

Ryan: Remember, this is not financial advice. We’re on the frontier, and it’s not suitable for everyone, but we’re glad you’re on this Bankless journey with us. Thank you!