The Turning Point of Blue Chip Assets and the Bitcoin Market in 2026: Three Catalysts Driven by Investment Trusts

Bitcoin has risen approximately 6-7% since the beginning of the year and is currently hovering around $88,000. However, more importantly, the entire cryptocurrency market is undergoing a structural shift unlike any before, driven by the emergence of institutional investor products such as investment trusts that support this rally. Instead of relying on the traditional 4-year cycle, capital concentration and institutionalization in blue-chip assets will likely lead the market moving forward.

Political Instability and Macroeconomics Drive Bitcoin Buying

According to Greg Cipolaro of NYDIG Research, the primary factor supporting Bitcoin’s rise in early 2026 is U.S. political instability. Ongoing tensions between Donald Trump and Federal Reserve Chair Jerome Powell are increasing market participants’ risk perception.

He points to historical lessons. Pressure from President Richard Nixon on the Fed in 1972 led to subsequent financial policy collapse and high inflation. “Political interference in monetary policy almost invariably has negative effects, resulting in a decline in central bank credibility and currency weakening,” Cipolaro states.

Bitcoin, with its fixed supply, functions as a traditional hedge against such currency uncertainties. Furthermore, as the global money supply reaches record highs, demand for BTC as “digital gold,” similar to precious metals like gold and silver, is resurging.

End of the 4-Year Cycle: Blue-Chip Investment Trusts Dominate Market Dynamics

Historically, the cryptocurrency market has moved in a 4-year cycle based on Bitcoin halving events. After a halving (an event where block rewards are cut in half), prices surge, then speculation cools, and before the next halving, a bear market typically sets in.

However, according to market maker Wintermute, this 4-year cycle pattern may have come to an end. The firm notes, “While 2025 did not deliver the expected rally, it may be remembered as the beginning of a shift from speculation to a more established asset class for cryptocurrencies.”

This shift is driven by investment trusts offered by blue-chip companies such as ETFs and Digital Asset Trusts (DAT), which have brought structural changes to the market. These institutional products ensure ongoing capital inflows into large assets like Bitcoin and Ethereum, but the mechanism for capital to naturally flow into the broader market has been lost.

Side Effects of Capital Concentration via Institutional Products

In the past, there was an “alt season” where profits from Bitcoin flowed into Ethereum, then into blue-chip altcoins, and eventually into more speculative tokens. This capital cascade helped buoy the entire market.

However, with the advent of investment trusts—“enclosed gardens”—this transmission mechanism has broken down. The average duration of altcoin rallies in 2025 shrank to just 20 days from over 60 days in 2024. Although blue-chip altcoins like Solana (SOL) and Ripple (XRP) have seen multiple spot ETF listings, their ripple effects on the overall market remain limited.

Moreover, retail investor interest has shifted toward stocks, especially those related to AI, rare earths, and quantum computing, making 2025 a year of extreme capital concentration. With Ethereum (ETH) currently trading around $2,950, much of the market has lost momentum.

Three Major Catalysts: Pathways to Market Expansion

Breaking through the challenge of limited capital circulation via investment trusts requires three key catalysts.

The first catalyst is the expansion of asset composition by institutional investors. Currently, spot ETFs for Solana ($123.43) and XRP ($1.88) are already listed, and more ETF applications related to blue-chip altcoins are under review. Expanding the scope of investment trusts could lead to broader capital distribution across blue-chip assets.

The second catalyst is a strong rally in Bitcoin or Ethereum, creating a “wealth effect.” Rising prices of large assets can improve investor sentiment, potentially spilling over into the broader altcoin market.

The third catalyst is the reflow of capital from individual investors. Capital returning from stocks to the crypto market could bring in new stablecoin inflows and restore risk appetite.

Wintermute states, “Ultimately, how much capital re-enters digital assets remains uncertain,” and notes, “The outcome will depend on whether any of these catalysts can significantly expand liquidity beyond a few major blue-chip assets or if concentration persists.”

The cryptocurrency market has entered an era dominated by new intermediaries—investment trusts. While demand for blue-chip assets remains steady, a broader market expansion depends on the recovery of more extensive capital circulation mechanisms.