How will the crypto world evolve in 2026? This institutional forecast report is worth a look

Bankless recently released a comprehensive forecast analysis for the crypto industry in 2026, spanning multiple top investment institutions. By integrating insights from Bitwise, Coinbase Institutional, Galaxy, Grayscale, CoinShares, a16z, and others, we can glimpse the potential outline of the industry in the coming year.

Five Industry-Wide Consensus Trends

Stablecoins Evolve from Infrastructure to Payment Backbone

Multiple institutions point to the same conclusion: 2026 will be the breakout year for stablecoins. Unlike the current fragmented state with USDC, USDT, and others operating independently, stablecoins are evolving into a true global payment track. Galaxy’s prediction is especially bold — stablecoin trading volume will surpass the US Automated Clearing House (ACH).

This change may be subtle for ordinary users. For example, when transferring via Coinbase Wallet, it appears to be Venmo-level speed, but underlying transactions are already USDC. Future scenarios could be: users shopping, completely bypassing traditional payment networks (like Visa), with faster transactions and lower costs. However, whether traditional banking systems (like Wells Fargo) can adapt to this wave remains uncertain.

Bitwise also offers a provocative prediction — at least one emerging market will see its local currency depreciate due to stablecoin usage, as residents shift from their own currency to internet-based dollars.

Asset Tokenization to Grow Tenfold

From pilot projects to scaled deployment, this is the main script for asset tokenization in 2026. While BlackRock’s BUIDL fund is already a tangible product, most projects are still in experimental stages. However, Coinbase’s data is striking: tokenized assets could grow from the current $20 billion to $400 billion.

What does this mean for native crypto users? Theoretically, it includes 24/7 US stock trading and assets entering DeFi lending protocols. But the reality may be more complex — securities tokenization faces high legal hurdles, and directly integrating these assets into protocols like Aave isn’t practical. Industry consensus is that 2026 remains in the infrastructure development phase, with true DeFi integration likely waiting until 2027.

Expansion of Crypto ETFs

Bitwise predicts that the US market will see over 100 new crypto-related ETFs next year. From altcoins to diversified funds to Bitcoin products, various innovative ETFs are launching. Notably, Galaxy forecasts a net inflow of $50 billion into Bitcoin ETFs, and Bitcoin may be included in mainstream retirement plans like 401(k)s.

Market Structure Legislation May Break Through

The Market Structure Legislation has a chance to pass in 2026, though with uncertainty. While Republican control might favor crypto, 2026 coincides with midterm elections, making political negotiations intense. Democrats might leverage Trump’s crypto business history as bargaining chips, potentially pushing some form of legislation through.

Market Prediction Market Goes Mainstream

Based on this year’s US elections, prediction markets like Polymarket have proven their value. Multiple institutions forecast that by 2026, Polymarket’s weekly trading volume will stabilize above $1-1.5 billion, transforming from niche tools into mainstream financial instruments.

Controversies and Divergent Predictions

Quantum Computing Threat Becomes Public Focus

Most forecasts believe quantum threats won’t be imminent in 2026, but some industry voices are sounding alarms. Including Nick Carter, they argue that Bitcoin’s upgrade pace is too slow; if we don’t start addressing quantum threats now, it may be too late by 2030.

This touches on a fundamental contradiction in the Bitcoin community: Bitcoin’s narrative advantage (digital gold, eternal store of value) is becoming a technical dilemma. After all, Bitcoin is software, and software could eventually be cracked by sufficiently powerful computing. If Bitcoin insists on “no code changes,” quantum computing could threaten this oldest crypto asset’s survival. In contrast, Ethereum’s potential quantum resistance offers a stronger advantage.

Inevitability of Hybrid Finance

CoinShares introduces the concept of “Hybrid Finance,” depicting a new scenario: public chains as settlement and composability layers, while traditional financial institutions provide regulation, distribution, and custody. This combination seems almost inevitable — you can’t turn real equity assets (like Apple stock) into “unregistered assets,” or else, if hacked, responsibility becomes untraceable.

Interestingly, you can build decentralized foundations and then create centralized applications on top, but the reverse is nearly impossible. This asymmetry explains why crypto assets are long-term bullish — when two distrustful nations (like China and the US) need to exchange assets, the only way to ensure trust is through a decentralized settlement layer.

Privacy Becomes Chain-Level Competitive Edge

Galaxy forecasts that privacy tokens will surpass $100 billion in market cap by 2026. Although current privacy solutions are limited (mainly Monero and Zcash), a16z provides a deeper logic: privacy will become the most critical moat in crypto. Those who can solve privacy issues will create chain-level lock-in — because “secrets” are extremely difficult to cross-chain migrate.

Shift of Power from CEX to DEX

Galaxy predicts that by the end of 2026, DEXs will account for over 25% of spot trading volume. The driving logic is economic — DEX fees are much lower than centralized exchanges, and as user experience improves, the high-profit model of CEXs will be hard to sustain. Even Coinbase is undergoing a “self-revolution” by integrating DEX protocols via its Base chain.

Two Major Disagreements on the Future

Three Possible Futures for Digital Asset Companies (DAT)

There are three distinct expectations about DAT’s future:

Coinbase is most optimistic, believing DAT will evolve into “DAT 2.0” — no longer just holding assets, but moving toward professional trading, custody, and even purchasing “sovereign block space” (producing blocks and leasing space).

Galaxy, on the other hand, predicts at least five digital asset companies will be forced to sell, be acquired, or shut down due to poor management.

Grayscale remains the most cautious, considering DAT a false proposition and unlikely to be a significant factor in 2026.

In reality, these views may not be entirely contradictory — perhaps one or two companies will successfully evolve along Coinbase’s path, while others, as Galaxy suggests, will gradually fade away. Grayscale’s judgment also makes sense: DAT is more a tool for bull markets; in bear markets, they can only lie dormant.

Is the Bitcoin Four-Year Cycle Broken?

Regarding 2026 price trends, opinions are divided:

Bitwise and Grayscale believe Bitcoin will break the four-year cycle, reaching new highs in the first half of 2026.

Galaxy and Coinbase hold the opposite view, expecting turbulence in 2026, driven by macro factors, with prices oscillating between $110,000 and $140,000.

Looking at the yearly candlestick patterns, Bitcoin in 2025 only shows a small red candle. There are two interpretations: either the decline isn’t sufficient, and further dips are expected in 2026; or the necessary correction has already been completed, setting the stage for a new rally. Most analyses suggest that 2026 is unlikely to see extreme moves — no super green candles doubling early on, nor deep red candles. Expected volatility ranges from -15% to +50%.

Ethereum vs Bitcoin: Valuation War

Ethereum’s Triple Identity and Valuation Dilemmas

2025 looks solid for Ethereum’s fundamentals — clear roadmap, ZK tech starting to land, and long-term quantum resistance advantages over Bitcoin. Yet, these advances haven’t reflected in ETH’s price; even with institutions like Tom Lee buying about 3.5% of circulating supply in five months, the price remains stagnant.

The real disagreement isn’t about fundamentals but valuation models. If ETH is viewed as a “fee-based software network,” using a P/S ratio, on-chain fee revenue supports a price of only $39. But applying the same logic to Bitcoin yields an even more extreme result — Bitcoin has no “sales,” only miner rewards, worth about $10 (since miner income is ultimately personal income, not network revenue).

Data summarizes 12 different ETH valuation models: the most conservative P/S gives $39, but aggressive models based on Metcalfe’s Law (network active addresses and settlement scale) suggest ETH could be worth up to $9,400. The huge range from $40 to $10,000 itself indicates a fierce “valuation war” in the market.

Pessimists argue only Bitcoin deserves the “currency” label; other public chains are at best application platforms, valued by company or software logic. But from another perspective, ETH is a “trinity asset” — a smart contract platform, settlement layer, and also competing for currency premium.

Long-term, a blockchain’s survival depends on its market cap primarily from currency premium, not transaction fees. In a world of expanding block space, relying solely on fees can’t support a $100 billion+ L1 network. So ETH’s ultimate value hinges on its dominance as a smart contract platform.

Currently, Ethereum’s market leadership seems to have bottomed out — although Solana performs well, its growth is no longer as explosive as in early years. Conversely, the tokenization, stablecoins, and institutional access sectors are resurging. Based on locked-up value multiples, ETH should be worth around $4,000.

Bitcoin’s Calm Surface and Hidden Iceberg

In 2025, Bitcoin’s decline was only 6%, possibly the most moderate “bear market” in history. While US tightening policies are unfavorable for assets hedging fiat devaluation, in the long run, fiat tends toward zero, and tightening can’t last forever.

Institutional faith in Bitcoin hits a record high, but an “iceberg” appears on the horizon — quantum computing threats. Once prediction markets indicate increased likelihood of quantum decryption, Bitcoin prices will react early. From some angles, Bitcoin’s inability to effectively counter quantum threats might even benefit Ethereum the most.

A short-term collapse of Bitcoin could trigger a market crash, but in the medium to long term (one or two years), if investors see Ethereum proactively preparing for quantum resistance while Bitcoin does not, smart money will flow to the safer platform. Bitcoin’s failure doesn’t necessarily mean the end of the entire crypto industry.

Two Parallel Visions of the Future

The crypto world is diverging into two competing narratives:

Vision 1: Ethereum Alliance Chain — all functions (value storage, privacy, transactions) rooted in Ethereum as a neutral settlement layer. In this world, ETH is the core asset.

Vision 2: Specialized Application Chains — Bitcoin as “value storage,” Solana for “high-frequency execution,” Zcash for “privacy,” each chain operating independently. Here, Bitcoin is the currency, and other chains must prove their value through tangible revenue.

This competition resembles a “Yin-Yang game” — Ethereum seeks order, aiming to connect all chains into an interoperable network; the other vision is chaos, with many independent chains, with the only coordinator being centralized exchanges. This contest will last long, and investors should allocate assets across both visions.

The 2026 crypto market will be the year these two forces continuously battle and eventually take shape.