Key Points of the Crypto Market in 2026: Future Deployment from On-Chain Ecosystem Perspective

I. A True Reflection of the Current On-Chain Ecosystem

Bitcoin: Has shifted from a speculative asset to a standard institutional holding

Honestly, the performance of Bitcoin in 2025 can be summed up in one word—“turbulent.” It surged to $109,000 at the beginning of the year, then fell back; mid-year, with the Fed’s rate cut expectations, it rose again to around $125,000; by year’s end, it dropped to $85,000. The deepest retracement this year exceeded 33%, clearly indicating that after institutional funds entered, this asset’s volatility became even more sensitive—not to market sentiment, but to global liquidity and macroeconomic data.

On-chain data shows that trading volume mainly concentrated during major volatility periods, especially during rapid declines with significant volume spikes. This isn’t retail panic selling; it’s institutions adjusting their positions. After Bitcoin’s market cap sharply declined from its high, active addresses also decreased, indicating that the actual users of the network are relatively few—most are just speculating.

But this also highlights a reverse problem: BTC has already entered the institutional allocation framework. Throughout 2025, spot ETF fund flows were highly correlated with tariff policies, rate cut expectations, and fiscal uncertainties. When rate cut expectations appeared, ETF inflows surged; when tariff risks emerged, outflows occurred—classic institutional asset allocation behavior. This trend is expected to strengthen into 2026.

Ethereum: From an Ecosystem Foundation to Financial Infrastructure

Ethereum’s year can be described as a “roller coaster.” Starting from a high of $4040 at the beginning of the year, it plunged to $1447, a drop of over 65%. But from Q2 onwards, with rising rate cut expectations and large listed companies like BitMine and SharpLink beginning to stockpile ETH, its price soared to $4950, a 242% increase. Then… it fell again by 43%.

More interesting are the changes in the on-chain ecosystem. In August, when ETH hit its peak of $4950, TVL reached a yearly high of $91.2 billion, and the circulation of stablecoins within the Ethereum ecosystem also hit new highs. However, after the black swan event in October, all indicators reversed. Active addresses halved from 16.8 million to 8.34 million, indicating a large number of short-term speculators exited.

The performance of Layer 2 ecosystems best illustrates this. Although the total TVL of all L2s declined by 24.6%, Base bucked the trend, with its TVL share reaching 47.16%. This shows that users are making choices—they only want to stay on L2s with real applications and trading depth. Linea’s token price dropped 80% in three months after launch, indicating that L2s without ecosystem support are dead.

Solana: Performance Advantages Are Being Eroded

SOL’s performance this year was the most disappointing. Although on-chain activity remained high (mainly driven by the Meme sector), the price kept stagnating—it never recovered from the $294 high at the start of the year. Why can BNB attract funds through Meme topics while SOL is being diverted?

The key reasons are twofold: first, SOL’s ETF only launched in October, lacking institutional support; second, Solana’s ecosystem overly relies on the Meme narrative. When market risk appetite declines, there are no other attractions. Meanwhile, BNB Chain, through CZ and He Yi’s IP influence, created differentiated narratives like “Chinese Meme” and “Binance-themed Meme,” which attracted hot money away from SOL.

Therefore, performance isn’t the only metric. A diversified ecosystem and sustainable narratives are the long-term value drivers.

II. The Big Logic for 2026

1. Regulatory Windfalls Are Unlocking Trillions in Capital

After the US’s “GENIUS” and “CLARITY” bills were enacted, the crypto industry shifted from a “fight” phase to a “rules-based” game. How significant is this change? Institutional funds exceeding trillions of dollars are already waiting for this signal.

Why is this so critical? Because previously, institutions dared not enter at scale due to policy risks. Now, with clear rules, banks can openly issue compliant stablecoins and RWA on public chains, and institutional holdings of crypto assets can be reflected in financial statements—completely changing the game.

The scale of crypto asset custody will double compared to 2025, which sounds like a number but actually means—from private to public holdings. This will directly boost the overall market liquidity floor.

2. Bitcoin Is Truly Becoming a Strategic Reserve

In the first half of 2026, Bitcoin is expected to hit new all-time highs. Not because retail investors are chasing highs, but because at least five sovereign states will include Bitcoin in their national treasuries.

Imagine what happens when a country writes BTC into its foreign exchange reserves. First, the supply side will be frozen—these coins won’t enter the market. Second, credit endorsement will be significantly enhanced—if countries are stockpiling, why shouldn’t I? Lastly, volatility will decrease—when the holder structure shifts from speculators to sovereign funds and pension funds, the pricing logic will change entirely.

Moreover, corporate treasury holdings will become normalized. Bitcoin will shed its label as a “high-risk speculative asset” and become a “must-have item on corporate balance sheets.” This means supply will be locked in long-term.

3. Stablecoins Will Truly Dominate Global Settlement

In 2026, the annual settlement volume of stablecoins will surpass Visa. Not a “might,” but a “will.” Because the conditions are all in place:

• Regulatory frameworks are clear
• On-chain infrastructure is mature
• Yield-bearing stablecoins are emerging (despite a risk event in October)
• Central Bank Digital Currencies (CBDCs) are designing for interoperability

Most importantly, stablecoins will become a 24/7 global clearing network. Visa relies on banking systems for settlement, but stablecoins are fully decentralized—just a wallet address can complete cross-border settlement.

Additionally, yield-bearing stablecoins will integrate with tokenized deposits, allowing your USDC to earn yields from US Treasuries directly. What does this mean for global users? They can earn the safest yields worldwide without a bank account.

4. RWA Market Will Break Through $500 Billion

The tokenization of real-world assets (RWA) will surpass $500 billion. This isn’t a niche topic; it means 2% of US Treasuries worldwide will circulate via blockchain.

More aggressively, crypto exchanges will upgrade into “full-asset centers.” You will be able to trade BTC, AAPL stocks, US Treasuries, Meme coins—all assets sharing liquidity pools. In other words, the boundary between crypto markets and traditional finance will disappear.

What does this mean for trading depth? A revolutionary change. Currently, BTC liquidity is isolated, stock liquidity is separate; each market operates independently. Once linked via RWA, liquidity will flow across markets, greatly improving price discovery efficiency.

5. AI Agent Economy Will Truly Go On-Chain

Represented by protocols like x402, AI agents will have independent wallets and initiate transactions autonomously. It sounds sci-fi, but it will directly change the logic of on-chain economic operations:

• Over 30% of on-chain interactions will be performed by AI
• Support for single transactions as low as $0.001 (not necessary for humans, but essential for AI)
• Real-time payments for compute leasing and data procurement

In simple terms, machine-to-machine financial systems will be established on-chain first. This will create a new economic layer alongside human activity—parallel but not directly competing.

6. Public Chain Competition Enters the “Differentiation” Era

In 2026, public chains will no longer compete solely on performance but on “who exactly they want to serve.”

• Ethereum continues as an institutional settlement layer (over 40% of institutional transactions)
• Solana focuses on social and payment interactions (high frequency, low cost)
• Other specialized chains deepen in AI computing power and DePIN (IoT) sectors

This division will be very clear. No more “I want to be Ethereum killer” new chains; instead, “I specialize in XYZ”—a vertical deepening of public chains. Market competition will shift toward segmentation.

III. The Macro Environment Is Changing

The Fed’s rate cut cycle has begun, but at a slower pace than expected. What does this mean? Long-term interest rates will stay relatively high.

For the crypto market, this is good news:

• High interest rates curb extreme bubbles in risk assets (no more 2021-style madness)
• But also increase the attractiveness of risk assets (since risk-free rates are high, the return for taking crypto risk must rise)

Rising unemployment indicates that economic resilience is weakening. This will push policies from “anti-inflation” to “steady growth,” encouraging capital to shift from speculative premiums back to stable growth. As a risk asset, crypto will benefit from this.

IV. Practical Insights for Traders

What to focus on this year?

1. Regulatory developments: The details of enacted bills will directly influence capital flows
2. Institutional holdings changes: Watch for fund flows in DApps and ETFs (these are new liquidity sources)
3. Ecosystem real-world applications: Don’t just look at TVL; focus on active addresses and real trading volume
4. Stablecoin flows: Inflows and outflows of stablecoins will lead price movements

Risks to Watch Out For

• Forced liquidations of high-leverage institutional positions (more intense than retail liquidations)
• Geopolitical shocks affecting US Treasury yields (which will impact BTC valuation)
• Stablecoin de-pegging risks (especially for new yield-bearing stablecoins)
• Increased competition among public chains causing liquidity droughts in smaller tokens

V. One Sentence Summary for 2026

The crypto market is shifting from a “retail speculation cycle” to an “institutional allocation cycle,” from “pure risk assets” to “alternative financial assets.” This means volatility will become more rational, but opportunities will be clearer—because genuine liquidity will concentrate in assets with solid fundamentals.

BTC will remain stable, ETH will rise, SOL needs new narratives, stablecoins will become infrastructure, and RWA will be a new growth point. The entire market story will change from “Will it die?” to “How to profit.”