2025 was a dramatic year for the crypto market: at the beginning of the year, driven by a warming macro environment and favorable policies, the prices of Bitcoin and Ethereum soared to new historical highs, with institutional funds rushing in and the wave of Digital Asset Treasury (DAT) companies sweeping the capital market. However, after a hot summer, market sentiment took a sharp downturn, and the "10·11 Panic Night" in early October triggered a deleveraging stampede, causing Bitcoin prices to plummet, while altcoins faced a "Waterloo"-style crash, resulting in a rollercoaster trend of "first rising and then falling" throughout the year.

This article will conduct an in-depth review of the 2025 crypto market from multiple perspectives, including macro environment, policy regulation, institutional participation, market trends, sector hotspots, and on-chain data, and based on this, look ahead to the development trends and investment opportunities in 2026. The article aims to outline the key events and data of 2025, distill the internal logic of market evolution, and provide investors with forward-looking insights for the upcoming year.

I. Macro Shift and Favorable Policies: The "Tailwind" for the Crypto Market

1. Global Macro Environment Warming

In 2025, the global economic environment improved relatively, with easing inflation pressures prompting major central banks to shift their monetary policy stance towards easing. The Federal Reserve ended a two-year rate hike cycle in the first half of the year and initiated a rate cut cycle before the end of the year, officially concluding its quantitative tightening (QT) plan on December 1, 2025.

The expectation of lower borrowing costs enhanced the market's preference for risk assets, leading to a bull market in U.S. stocks driven by the AI boom, with tech stocks leading the charge and the S&P 500 index reaching new highs. However, the strength of the U.S. stock market also diverted some attention and funds away from crypto assets, causing the overall performance of the crypto market in 2025 to lag behind that of U.S. stocks.

In the commodities sector, with the U.S. dollar weakening and geopolitical risks rising, gold prices steadily climbed, continuously hitting historical highs due to safe-haven demand, while oil and other commodity prices saw moderate increases due to a global demand recovery.

Overall, the macro environment was relatively friendly to the crypto market in the first three quarters of 2025, with a weaker dollar and peak interest rates providing bullish support and ample liquidity for risk assets. However, in the fourth quarter, global market volatility intensified, and soaring U.S. Treasury yields triggered a return of risk aversion, impacting high-beta crypto assets.

2. U.S. Regulatory Easing

With the conclusion of the U.S. presidential election at the end of 2024, pro-crypto candidate Trump returned to the White House and quickly fulfilled his campaign promises upon taking office in January 2025, releasing unprecedented positive policy signals for the crypto industry and accelerating the "regulatory reversal": the passage of the "GENIUS Act" stablecoin bill provided a clear framework for the reserve regulation and compliance operation of U.S. dollar stablecoins; at the same time, bipartisan lawmakers collaborated to advance a new digital asset market structure bill, clearly delineating the regulatory boundaries between security tokens and commodity tokens, and officially recognizing the legal status of mainstream crypto assets like Bitcoin and Ethereum. These measures marked a shift in the U.S. regulatory attitude from previous high-pressure crackdowns to rational inclusivity, injecting a shot of adrenaline into the crypto market.

On the enforcement side, the SEC and CFTC also adjusted their strategies, placing greater emphasis on collaboration with the industry and providing clear guidance, supporting innovative development while protecting consumers and financial stability. For example, the CFTC adopted an open attitude towards prediction markets, viewing them as derivative contracts based on real events and allowing compliant platforms to offer such trading.

The significant improvement in the U.S. regulatory environment not only boosted domestic market confidence but also had a demonstration effect on other jurisdictions worldwide. Europe officially implemented the MiCA framework in 2025, establishing unified regulatory standards covering issuance, trading, custody, and more; Hong Kong launched a comprehensive virtual asset exchange licensing system and drafted stablecoin regulatory regulations, striving to create a crypto financial center in the Asia-Pacific region; regions like the Middle East and Singapore further optimized tax and compliance policies to attract crypto startups and capital. In contrast, mainland China maintained a strict regulatory stance on crypto trading, even reiterating its crackdown on crypto speculation at the end of 2025, highlighting the divergence in policies among countries.

Overall, the global crypto regulatory environment in 2025 improved significantly compared to previous years, with the easing of U.S. policies allowing compliant funds to enter the market on a large scale and prompting other countries to explore regulatory frameworks that adapt to the new asset class, creating a "competitive cooperation" dynamic. This series of favorable policies laid the foundation for the prosperity of the crypto market in the first half of 2025.

3. Traditional Finance Embracing Crypto

While policies broke the ice, traditional financial institutions embraced crypto assets on a large scale in 2025, pushing the industry further towards mainstream adoption. First, spot Bitcoin ETFs were launched on a large scale. Following the approval of the first Bitcoin spot ETF in the U.S. at the end of 2024, 2025 saw a massive influx of funds. By December 25, 2025, the total assets under management (AUM) of U.S. Bitcoin spot ETFs reached approximately $117.3 billion, holding over 1.21 million Bitcoins, accounting for about 6.13% of the total Bitcoin supply. The AUM of Ethereum ETFs was approximately $17.1 billion, about one-tenth of that of Bitcoin ETFs. In the second half of 2025, an "Altcoin ETF craze" emerged, with multiple mainstream altcoin ETFs receiving approval and being listed for trading, including Ripple (XRP), Solana (SOL), Litecoin (LTC), Dogecoin (DOGE), Hedera (HBAR), Chainlink (LINK), etc.

Source: https://www.coinglass.com/bitcoin-etf

Benefiting from accounting standard reforms (allowing crypto assets to be measured at fair value) and a shift in venture capital preferences, a large number of small and mid-cap listed companies announced plans to follow MicroStrategy by allocating part of their cash reserves to Bitcoin, Ethereum, and other crypto assets, transforming into "Digital Asset Treasury Companies (DAT)." According to CoinGecko data, a total of 193 listed companies have announced crypto treasury plans, raising over $120 billion for the purchase of BTC, ETH, SOL, BNB, and other crypto assets. Many traditional industry companies attempted to share in the crypto bull market's dividends through this move, and their stock prices surged several times due to news of their holdings.

Source: https://www.coingecko.com/en/treasuries/companies

In terms of institutional investors, traditional hedge funds and sovereign funds also showed increased interest in crypto: products like Grayscale Trust continued to see incremental buying in the secondary market, and some sovereign wealth funds in the Middle East and Asia were reported to have quietly increased their Bitcoin holdings during the fourth quarter when prices fell sharply, positioning themselves for long-term investments. Additionally, the U.S. Department of Labor relaxed restrictions on retirement plans investing in digital assets in 2025, allowing 401(k) and other pension plans to allocate a small percentage to approved crypto funds or ETFs, opening the door for potential trillions of dollars in retirement funds to flow into the crypto market.

In 2025, several traditional financial institutions attempted to introduce stock trading on the blockchain, marking the dawn of on-chain stock trading. Nasdaq and others established pilot programs to issue shares of some listed companies in token form on permissioned chains, with xStocks, Ondo, and others launching tokenized stocks and integrating them with mainstream trading platforms. This indicates that the integration of traditional securities markets with crypto technology is accelerating, and in the future, digital assets are expected to not only represent emerging tokens but also encompass the on-chain forms of traditional assets.

It can be said that in 2025, traditional finance fully embraced crypto assets across regulatory, product, and capital levels, with crypto rapidly integrating into mainstream investment portfolios, and the "liquidity handshake between Wall Street and the crypto market" has already begun.

II. Market Review: A Rollercoaster of Bull and Bear Transitions

1. Overall Market Characteristics: Big Ups and Downs

The crypto market in 2025 experienced a rollercoaster of "big ups and downs": at the beginning of the year, it continued the strong upward momentum from the end of the previous year, with mainstream coins like Bitcoin and Ethereum climbing steadily and reaching historical highs around the third quarter; however, in the fourth quarter, the market quickly fell amid leverage squeezes and panic sentiment, resulting in a "high before low" trend for the year.

Source: https://www.coinglass.com/currencies/BTC

After breaking through the $100,000 mark at the end of 2024, Bitcoin continued its upward momentum, and in January 2025, MicroStrategy announced another significant purchase of BTC, pushing the price close to $107,000. Subsequently, the market entered a brief consolidation period, with BTC prices slightly retreating in February and March but remaining above $80,000, setting the stage for the next round of increases. As favorable regulatory news from the U.S. continued to emerge, ETF funds flowed in, and news that the Trump administration planned to position Bitcoin as a strategic reserve asset gained traction, Bitcoin regained its upward momentum in the second quarter. Bitcoin rose from around $95,000 at the beginning of the year to about $120,000 in early the third quarter, an increase of nearly 7-8 times from the bear market bottom of approximately $16,000 in 2022. Unlike previous bull markets, this round of increases was relatively steady, without the irrational frenzy of vertical surges, with new funds primarily concentrated in BTC and a few leading assets.

Just when many investors thought the market would continue to rise towards the end of 2025 along the "four-year cycle," a dramatic turning point occurred. In early October, Bitcoin surged to around $126,000, a historical high, without any obvious negative news. However, on October 11, market liquidity suddenly reversed, with multiple trading platforms experiencing unusually large sell orders almost simultaneously, triggering a chain reaction. Bitcoin's price broke through the psychological barriers of $120k, $100k, and $90k within days, dropping to around $80,000, a nearly 37% decline from its peak. Mainstream coins like Ethereum also plummeted, with ETH prices falling from around $5,000 to about $3,000. Small and mid-cap tokens fared even worse, with statistics showing that the vast majority of altcoins fell 80% to 99% from their highs during the year, with many small tokens nearly going to zero. This event, comparable to the "5·19 crash" in 2021 and the "3·12 crash" in 2020, was referred to as "10·11 Panic Night" in the industry, marking the abrupt end of the bull market.

After the crash, the market entered a long recovery period. In mid-November, Bitcoin briefly dipped close to $80,000, then gradually stabilized and rebounded. By the end of December, BTC prices returned to around $90,000. Ethereum hovered just above $3,000 at year-end, not far from its level at the beginning of the year. Altcoins were severely impacted: many second and third-tier coins saw annual declines of over 50%, and investor confidence plummeted. However, during the same period, traditional risk assets like U.S. stocks only experienced slight corrections and remained close to their annual highs. This indicates that the deep pullback in the crypto market in 2025 was more a result of internal leverage bubbles bursting rather than being entirely driven by a deteriorating macro environment.

2. On-Chain Ecosystem Performance

Behind the dramatic fluctuations in market prices, on-chain data more accurately reflects the changes in capital flows, user behavior, and ecosystem structure in 2025.

1) "Main Chain Division of Labor" Further Solidified: Ethereum continued to play the role of a secure settlement layer and the largest liquidity base, while Solana, BNB Chain, and Base functioned more like "traffic chains" for high-frequency trading and consumer applications. From the perspective of DeFi Total Value Locked (TVL), Ethereum remained the core asset throughout the year, and by the end of 2025, its on-chain stablecoin scale was still in an absolute leading position.

Source: https://defillama.com/chains

2) Structural Migration of Trading Volume and User Activity: Solana competed with Ethereum for the top spot multiple times on a weekly basis in 2025, even briefly leading. BNB Chain absorbed a significant amount of spot and liquidity demand through leading applications like PancakeSwap, and in 2025, the on-chain fee structure exhibited "unit fee compression," meaning transactions could be cheaper and more frequent. The rise of Base was more "product-oriented": by the end of the year, its on-chain metrics displayed typical characteristics of "high transaction numbers + high active addresses," becoming one of the strongest new traffic entry points in the Ethereum ecosystem.

3) Changes in Fees/Revenue Direction: In 2025, on-chain transaction fees were not solely driven by L1/L2 itself, but increasingly contributed by applications, with trading, wallets, and consumer applications pushing the narrative of on-chain from "infrastructure narrative" to "cash flow narrative." This is also why, when risk events or macro tightening occurred in Q4, on-chain liquidity exhibited characteristics of "quick in and out."

4) Stablecoins and Yield Strategies Became Ecosystem Adhesives: Ethereum remained the core battleground for stablecoins and yield products, and in 2025, yield-bearing stablecoins and strategy products expanded significantly: Ethena's USDe maintained a scale of several billion dollars by year-end, becoming one of the representative assets for "dollar-like yields" on-chain. Yield-splitting/market products like Pendle had accumulated billions of dollars in TVL by mid-2025, with numerous combination strategies revolving around yield-bearing stablecoins like sUSDe, accelerating the cycle of "deposit---yield---re-staking---re-circulation."

5) Staking and Lending Remained Major Vehicles for Large Funds: Lido on the Ethereum side and Jito on the Solana side jointly promoted the "financialization of staked assets." The lending sector leaned more towards "stablecoin and blue-chip collateral" efficiency competition: leading lending protocols continued to absorb collateral and borrowing demand, providing infrastructure for yield strategies and leveraged trading.

6) CEXs Stepped Down to Serve as On-Chain Trading Entry Points: Taking Binance Alpha as an example, its core selling point was integrating on-chain discovery and trading into the exchange, reducing the barriers of wallets and gas fees. Bybit Alpha also clearly strengthened the "account-based on-chain trading" product path in 2025. Bitget emphasized a unified on-chain trading entry across multiple chains, further amplifying the hybrid model of "CEX responsible for users and risk control, on-chain responsible for assets and settlement." Such products significantly increased the speed of on-chain asset dissemination and trading frequency during the bull market phase, but during the Q4 risk sharp brake, they also led to more concentrated and synchronized liquidity withdrawals.

3. Investor Sentiment and Capital Flows: A Tale of Two Extremes

In 2025, investor sentiment experienced a rollercoaster shift from extreme heat to extreme cold. In the first half of the year, retail investors returned to the market, crypto social media became active again, and various narratives emerged in succession. From AI concepts to memes, hot topics were abundant. However, unlike in the past, the lifespan of these narratives was noticeably shorter—topics that could sustain interest for months in previous years might now be replaced by the next story within days.

After the October crash, market sentiment plummeted, with the greed index falling into deep fear territory, and by the end of 2025, Bitcoin's 30-day volatility had dropped to its lowest point in recent years. However, on-chain data showed that after the October crash, the number of large Bitcoin addresses (holding over 10,000 coins) began to rise, indicating that long-term funds like sovereign wealth funds were accumulating at low prices. It can be anticipated that the market in 2026 will be more rational and mature than in 2025, with investment styles possibly shifting from chasing hot topics to long-term value allocation, creating a fertile ground for steady growth.

III. Review of 2025 Crypto Industry Hotspots

Despite the significant price fluctuations in the market, the crypto field in 2025 was not solely about rising and falling numbers. This year still saw many memorable technological breakthroughs, application innovations, and industry trends, laying the foundation for future development.

1. Institutionalization and Compliance: The Maturation of the Crypto Industry

2025 was seen by many as the "coming of age" for the crypto industry, marking the transition from a retail-driven speculative phase to an infrastructure phase with institutional participation. By 2025, institutions had become marginal price setters for crypto assets, with weekly inflows into U.S. spot Bitcoin ETFs exceeding $3.5 billion in the fourth quarter, far surpassing the net trading flows of retail investors during the same period.

The entry of institutions brought dual effects: on one hand, long-term funds have low risk appetite and trading frequency, leading to decreased market volatility and more effective pricing; on the other hand, these funds are highly sensitive to macro interest rates, causing the crypto market to be more closely tied to macro cycles, and once liquidity tightens, price pressures become more pronounced.

Compliance gradually became a moat for crypto projects: platforms with licenses, robust risk control, and regulatory technology frameworks gained institutional trust, leading to rising trading volumes and market shares; conversely, non-compliant gray platforms were marginalized or even eliminated. For example, the compliant exchange Coinbase in the U.S. saw record high users and revenues, and a batch of decentralized compliant financial infrastructures began to emerge, such as trustless custody solutions based on Ethereum.

2. Stablecoins: Bill Passage and Application Expansion

The U.S. stablecoin bill established that issuers of fiat-backed stablecoins must hold high-quality short-term assets as reserves and undergo regular audits. This move enhanced the credibility of mainstream stablecoins like USDC and USDT and encouraged more traditional financial institutions to participate in stablecoin issuance or usage.

Throughout the year, on-chain stablecoin trading volume reached $46 trillion, making it a "killer application" in the crypto field. At the same time, several risk events related to stablecoins occurred during the year, such as the high-yield algorithmic stablecoin XUSD collapsing to $0.18 due to excessive reliance on endogenous leverage, resulting in nearly $93 million in user losses and leaving $285 million in bad debts for the protocol. These incidents reminded the industry to be cautious with complex stablecoin designs.

However, overall, the position of fiat-backed stablecoins became more solid. By the end of 2025, the circulating market value of dollar stablecoins continued to grow steadily, with new scenarios constantly emerging: businesses used stablecoins for cross-border trade settlements to avoid the high costs and delays of SWIFT; consumers used stablecoins for daily shopping through third-party payments; residents of some high-inflation countries in Latin America and Africa treated dollar stablecoins as savings. Forbes' outlook indicated that stablecoins would become ubiquitous in 2026, further penetrating traditional financial transactions and corporate treasury management.

3. RWA: From Concept to Reality

2025 witnessed the tokenization of real-world assets (RWA) transitioning from conceptual hype to large-scale implementation, becoming an important component of the crypto capital market. As institutions sought to obtain traditional yields on-chain, government bonds, real estate, stocks, and other real assets were tokenized and brought onto the chain. According to statistics, by the end of 2025, the total market value of various RWA tokens exceeded $19 billion, with about half of the market value coming from tokenized products of U.S. government bonds and money market funds. BlackRock issued $500 million in tokenized U.S. government bonds (code: BUIDL) via blockchain. Meanwhile, established Wall Street institutions like JPMorgan and Goldman Sachs developed RWA infrastructures that transitioned from experimentation to production, with JPM's Onyx and Goldman’s GS DAP platforms beginning to handle actual transactions, bringing corporate loans, accounts receivable, and other assets onto the chain.

Source: https://app.rwa.xyz/

Stablecoin issuers also rode the RWA wave: companies behind USDT and USDC began to increase their holdings of short-term U.S. Treasury bonds as reserves to enhance transparency; the decentralized central bank MakerDAO introduced on-chain commercial paper and government bonds into its DAI collateral pool, supporting stablecoin supply with real income. Stablecoins backed by government bonds became vehicles for digital dollars. The biggest breakthrough for RWA in 2025 was the shift in investor mindset: people were no longer satisfied with purchasing synthetic tokens pegged to gold or stocks but preferred to buy assets issued natively on-chain.

The popularity of RWA also spurred the emergence of dedicated platforms and protocols. A number of blockchain projects emerged to serve the issuance, clearing, and trading of real assets, some focusing on real estate tokenization (selling property shares as small tokens), others on the tokenization of art and collectibles, and some providing comprehensive compliant issuance and custody solutions. Oracles played a key role in RWA, as reliable data sources were needed on-chain to reflect the value of off-chain assets, driving collaboration between oracle networks and traditional data providers. The direct benefit brought by the RWA wave was the broadening of collateral scope in DeFi: in the past, DeFi lending only accepted crypto assets, but now some protocols began to accept rigorously risk-controlled RWA tokens as collateral, such as government bond tokens being used to mint stablecoins or lend funds. This bridged the capital markets on-chain and off-chain, granting DeFi greater stability.

4. AI × Blockchain: The AI Economy Takes Shape

In 2025, the integration of AI and blockchain moved from proof of concept to initial implementation. Notably, the combination of autonomous intelligent agents (AI Agents) and the crypto economy gained attention. This year, we witnessed the emergence of AI-driven decentralized autonomous organizations, AI-executed smart contract trading, and AI models participating in economic activities on the blockchain.

Driven by major companies like Coinbase, Google, and Salesforce, the X402 protocol rapidly gained popularity, allowing AI to automatically pay for network resource access, achieving low-cost, second-level automatic payments, perfectly aligning with the high-frequency, small-amount payment needs of AI. Numerous startups emerged around X402, such as AI model training data markets that allowed models to autonomously purchase data; IoT devices using X402 for automatic payment of maintenance service fees, etc. X402 opened the door to the autonomous economy for AI, granting machine entities economic identities and autonomous trading capabilities.

Beyond payments, AI applications in blockchain governance and investment also made progress in 2025. AI governance DAOs began to appear: projects introduced AI decision assistants to help analyze proposals, detect contract vulnerabilities, and even automatically execute some operational decisions. AI trading agents attracted significant interest from quantitative investors. Some funds trained AI models to read on-chain sentiment indicators and macro data, automatically executing arbitrage and hedging strategies. Although AI trading still faced challenges related to black-box operations and regulation, its advantages in speed and big data analysis began to emerge.

The combination of AI and blockchain also gave rise to new token economic models. Some AI projects issued functional tokens, allowing holders to access AI services, such as exchanging tokens from a certain AI computing network for computing power. Additionally, some content platforms utilized AI to generate works and sold them through on-chain NFTs, with buyers simultaneously obtaining rights to value appreciation from AI's continuous iterative training. Although many AI + blockchain projects saw inflated valuations in the early bull market and were halved as the market cooled, some leading projects proved their value. For instance, AI security auditing tools and AI risk control model services saw strong demand among B-end clients, generating real revenue and supporting the intrinsic value of corresponding tokens.

5. DeFi Ecosystem: The Rise of Perp DEX and Prediction Markets

Decentralized exchanges for perpetual contracts (Perp DEX) became an undeniable force in the derivatives market. Leading Perp DEXs like Hyperliquid and Aster achieved record trading volumes in 2025, and with incentives like trading mining and fee rebates, they attracted numerous liquidity providers and market makers. A series of data indicated that the total trading volume of decentralized derivatives reached historical peaks in 2025, with DeFi derivatives evolving from early niche attempts to a systemically important market component.

Source: https://defillama.com/perps

The soaring of prediction markets was another major event in the DeFi space in 2025. Thanks to the CFTC's inclusive attitude and a surge in user interest in event betting, prediction platforms like Polymarket saw a dramatic increase in trading volume, becoming one of the fastest-growing verticals. Prediction markets effectively took on some functions of traditional financial options and betting markets; in addition to entertaining political or sports predictions, businesses could use prediction markets to hedge performance risks, and investors could leverage them to hedge against uncertainties in macro events. This expanded the application boundaries of DeFi.

Another notable trend in DeFi in 2025 was the rise of yield products and structured products. Traditional financial institutions began experimenting with DeFi lending protocols to enhance capital utilization, such as participating in the lending segment of cross-border trade financing. At the same time, to meet the stable investment needs of institutions, a batch of structured yield DeFi products emerged: for example, using options and lending in combination to generate two types of token shares for fixed and enhanced yields, achieving tiered interest rate markets. These innovations shifted DeFi from merely chasing high yields to refined risk pricing.

However, in 2025, various hacking attacks continued to emerge, with Balancer V2 losing approximately $128 million in assets due to contract vulnerabilities across its mainnet and forked projects. Some decentralized Lego-like combinations experienced collapses—complex yield aggregators and algorithmic strategy protocols faced runs due to excessive leverage and black-box manipulation during the transition from bull to bear markets, leading to token prices plummeting to zero. Some information finance (InfoFi) projects also experienced significant ups and downs: these platforms claimed to generate revenue through user-contributed information but quickly collapsed in the first half of 2025 after excessive expansion, as their models proved unsustainable and user attention was eroded by low-quality AI content and click-fraud behaviors.

6. SociaFi and NFTs: New Attempts at Traffic and Content

In 2025, the exploration of "social + finance" (SocialFi) continued, with some new attempts emerging, such as content creator DAOs: NFT-izing authors' works and crowdfunding support, allowing for transparent distribution of content creation revenues. However, overall, SocialFi did not see revolutionary breakthrough applications, as mainstream users primarily obtained crypto information through centralized platforms.

The NFT space also became more rational in 2025. Following the frenzy of 2021 and the lows of 2022-2023, the NFT market did not experience a new comprehensive bubble in 2025, but several sub-sectors performed outstandingly. One was the steady development of high-end art and luxury NFTs, with several top auction houses successfully holding NFT-specific auctions, renowned artists continuing to embrace blockchain works, and NFT art gradually gaining acceptance in the traditional art world, with some blue-chip NFTs maintaining their value during the bear market. Another was the rise of practical NFTs, such as music copyright NFTs and ticket NFTs, providing holders with ongoing rights or services, thus having a basis for value preservation. The gaming NFT sector also saw new explorations, with some games adopting a "free NFT + in-game purchases" model to lower user entry barriers and enhancing stickiness through on-chain asset interoperability.

IV. Outlook for 2026: A New Chapter Ready to Unfold

After the dramatic ups and downs of 2025, what kind of landscape will the crypto market face in 2026? Based on macro trends and structural changes in the industry, we make the following forecasts for the coming year:

1. Macro Environment: Opportunities for Liquidity Restructuring

The expectation of the Federal Reserve entering a rate-cutting phase will continue to be realized in 2026. If the U.S. economy shows significant signs of slowing, the rate cuts next year may exceed current expectations. The easing of the monetary environment will provide "fresh water" for risk assets, including Bitcoin, and global liquidity is expected to expand again.

At the same time, there are uncertainties in the geopolitical and trade environment, but fiscal stimulus policies are also expected to take effect, maintaining a high global risk appetite. However, it is essential to be cautious as the gains accumulated in traditional markets like U.S. stocks in 2025 are substantial, and some sectors (such as AI concept stocks) may have bubble concerns. If traditional assets undergo adjustments in 2026, it could temporarily drag down the crypto market.

Therefore, the macro impact on crypto will present dual aspects: liquidity easing + rising inflation will favor the logic of value storage, but if stock market bubbles burst and risk aversion rises, crypto may not be able to remain unscathed. Overall, the macro backdrop for 2026 is more positive compared to 2025, but close attention must be paid to cross-market risk transmission.

2. Policies and Regulation: Deepening Global Competition and Cooperation

The U.S. will continue to play a leading role in crypto policy in 2026. It is expected that the Trump administration will maintain the friendly attitude of 2025 and may even push for bolder measures, such as considering Bitcoin as part of national reserves. Congress may reach further consensus on the definition of security tokens and the powers of the SEC/CFTC, legitimizing many "gray area" projects.

The EU may initiate discussions on MiCA 2.0, covering new regulations for DeFi and NFTs; Hong Kong and Singapore will compete to attract Web3 companies, offering more competitive tax and licensing treatments; countries like Japan or South Korea may relax listing restrictions on certain tokens to revitalize their domestic crypto industries. International regulatory cooperation will also strengthen, especially in areas like anti-money laundering and cross-border regulation of stablecoins. It can be anticipated that in 2026, countries will attempt to establish common regulatory standards for stablecoins and discuss frameworks for the coexistence of central bank digital currencies (CBDCs) and private stablecoins. More broadly, discussions on the systemic importance of the crypto market may come to the forefront—as the market capitalization of crypto increases and its correlation with traditional finance rises, regulators will include crypto in macro-prudential management considerations and develop contingency plans for extreme situations.

In summary, the regulatory tone for 2026 may be characterized by "calmness": no longer fearing it, nor blindly promoting it, but regulating it as part of the financial system. This is undoubtedly a positive development for the long-term healthy growth of the industry. Of course, there may still be local regressions or tightening, and if significant fraud or money laundering cases occur, the short-term regulatory response may be stringent.

3. Institutional Deepening: Further Mainstreaming

In 2026, we expect to see more diverse ways for institutions to enter the market. First, major pension funds like 401(k) may formally launch Bitcoin/Ethereum allocation options for retirement accounts, opening a new era of long-term capital investment. Estimates suggest that even if only 1% of U.S. pension funds flow into crypto, the potential scale would be in the hundreds of billions of dollars, becoming a significant driver for the next long-term bull market. Secondly, sovereign funds and commercial banks in various countries are likely to increase their exploratory efforts in digital assets. Some national reserve funds may follow the examples of Singapore and the UAE by directly investing in Bitcoin ETFs or supporting the issuance of digital currencies in their countries; large banks in Europe and the U.S. may launch digital asset custody and brokerage services under compliant frameworks, incorporating crypto as a standard asset class in their wealth management.

In 2026, the industry is expected to see continuous improvements on both product innovation and compliance fronts: more structured products (such as volatility ETFs, yield certificate tokens, etc.) will emerge to meet the needs of clients with different risk appetites; at the same time, exchanges and custodians will strengthen transparency and capital requirements to ensure that past stampede tragedies do not recur. Institutional participation will increasingly change the market ecology—transactions will be dominated by large OTC and ETF trades, volatility will decrease, and Bitcoin's properties as a safe-haven and macro asset will become more pronounced. As Forbes analysis suggests, with the market becoming broader and more institutionalized, the historical pattern of Bitcoin's four-year cycle of dramatic ups and downs will fade, replaced by a continuous, gradual upward trajectory. For investors, this may mean fewer wealth myths but also a more mature and reliable asset class, making it easier for traditional investors to embrace on a large scale.

4. Technology and Applications: Six Structural Forces Paving the Way

In 2026, six major structural forces may drive the next phase of evolution in the crypto market:

1) Value Storage and Financialization: Bitcoin, Ethereum, and others will further financialize, with derivatives and lending markets maturing, bringing them closer to the performance of traditional assets like gold. As volatility decreases, they will attract more conservative capital allocations, increasing global adoption. Grayscale's research predicts that BTC will reach new highs in 2026, targeting $250,000. The magic of the Bitcoin halving cycle may fade, but its status as digital gold will be firmly established.

2) Stablecoin Boom: Stablecoins may experience a comprehensive explosion in 2026, with large tech companies potentially building their own stablecoin ecosystems, and more countries allowing banks to hold stablecoins directly for settlement. Mainstream payment networks like Visa/Mastercard may integrate stablecoins into their clearing processes, achieving seamless on-chain and off-chain payments. At the same time, a reshuffling will occur—small stablecoin projects lacking competitiveness will be eliminated, concentrating the market around leading stablecoins like USDT, USDC, USD1, and PYUSD. Businesses and individuals will be able to bypass the banking system for instantaneous global fund transfers, opening channels for cross-border capital flows.

3) Asset Tokenization: The trend of real assets moving onto the blockchain will accelerate. Some major exchanges may even partner with blockchain platforms to launch tokenized securities that can be traded around the clock, serving global investors. The refinement of financial products will also advance further, with more innovative ETFs and funds (such as composite ETFs containing Bitcoin futures and tech stocks) emerging, providing investors with more choices.

4) DeFi and TradFi Integration: The deep integration of banks and DeFi will become the new norm. We may see the first DeFi loan products issued by banks or enterprise-level payment smart contract platforms launched by Visa based on Ethereum. Dynamic yield, prediction markets, and other DeFi features will be embedded in traditional financial services. For example, an insurance company may use decentralized oracles and on-chain data to automate claims processing, reflecting the "on-chain" nature of traditional finance. Concepts of on-chain governance and compliance DAOs may also be piloted within enterprises to enhance efficiency and transparency.

5) Deep Integration of AI and Crypto: As discussed earlier, the embryonic form of the AI economy has emerged, and in 2026, we expect to see AI agents widely participating in economic activities. The X402 protocol may become an industry standard, being widely applied in IoT and web service payments. AI-driven on-chain investment advisors and risk control models will become more mature, and perhaps in 2026, some funds will publicly announce that they have adopted AI algorithms for investment decisions. The AI narrative in the next cycle will no longer just be storytelling but will be supported by practical applications and profit models.

6) Privacy and Security Infrastructure: As institutions and mainstream users place greater emphasis on privacy, privacy technologies may see breakthroughs in 2026. Some zero-knowledge proof and multi-party computation projects will achieve commercial viability, providing solutions for compliant privacy-protecting transactions and data sharing. Regulators may also allow the existence of privacy exchanges or privacy stablecoins under specific frameworks, serving compliant users (such as businesses needing confidentiality in transactions). In terms of security, 2026 is likely to be stable, but continuous attention is needed on cryptographic upgrades in the face of quantum computing threats, as well as the progress of social engineering and on-chain monitoring battles.

V. Outlook and Conclusion

Market Trend Outlook: Bull Market, Bear Market, or Transformation?

There are differing opinions regarding the market outlook for 2026. Some believe that the peak was reached in October 2025, and the four-year cycle pattern remains unchanged, predicting a prolonged bear market in 2026, with Bitcoin potentially falling back to the $50k-$60k range to find a bottom. These views are based on macro lagging effects and market inertia, suggesting that institutions will also follow the cyclical rhythm. In contrast, investors represented by institutions and long-term asset management firmly believe that this cycle has not ended and may even extend: they point out that continuous institutional buying will prolong the cycle to 4.5 or 5 years, and this 30% correction is merely a normal pullback within the bull market, believing that the bullish trend will persist throughout 2026 and drive BTC to new highs.

We comprehensively judge that the crypto market in 2026 is likely to emerge with a new paradigm of "weak cycles, long bull markets": no longer simply replicating the past's dramatic rise and fall rhythms, but generating several moderate amplitude waves in response to macro fluctuations, while elevating the central focus, potentially recording positive returns for the year. In other words, if there are no severe economic recessions or black swan events globally, Bitcoin, Ethereum, and others are likely to be higher than their prices at the beginning of the year in 2026. Major investment banks like BlackRock's strategic reports also support this view: they expect that as volatility decreases in 2026, crypto will gradually integrate into traditional asset allocation logic, and even without dramatic increases, it will be a year of continuous ecological restructuring. Of course, investors still need to be wary of potential risks, including regulatory uncertainties (political factors in an election year), technological vulnerabilities, and unpredictable macro market events.

Conclusion

Looking back at 2025, the crypto market swung violently between frenzy and freezing points; we witnessed the birth of historical highs and the sudden collapse of the market; we saw greed and fear alternating in dominance and observed innovation and transformation quietly gathering strength. Whether it is the shift in regulation, the entry of institutions, or the rise of new narratives like RWA, AI, and prediction markets, all indicate that the crypto industry is gradually maturing. As we approach 2026, it may no longer experience the extreme joy and despair of past cycles, but rather progress steadily in rationality and construction. This is not necessarily a bad thing for investors: fewer wealth myths, more long-term value; fewer illusory bubbles, more solid foundations. When the bubbles recede, truly outstanding projects and assets will stand out even more. Let us embrace cautious optimism and welcome the next iteration of the crypto market. In 2026, the exciting chapters of the crypto world await us to write together.

About Us

Hotcoin Research, as the core research institution of Hotcoin Exchange, is committed to transforming professional analysis into your practical tools. Through our "Weekly Insights" and "In-Depth Reports," we analyze market trends for you; leveraging our exclusive column "Hotcoin Selection" (AI + expert dual screening), we help you identify potential assets and reduce trial-and-error costs. Every week, our researchers also engage with you through live broadcasts, interpreting hot topics and predicting trends. We believe that warm companionship and professional guidance can help more investors navigate cycles and seize the value opportunities of Web3.

Risk Warning

The cryptocurrency market is highly volatile, and investing carries risks. We strongly recommend that investors conduct investments based on a complete understanding of these risks and within a strict risk management framework to ensure the safety of their funds.