Original Title: 2026 Digital Asset Outlook: Dawn of the Institutional Era
Original Author: Grayscale research team
Translation: Peggy, BlockBeats

Editor's Note: After experiencing years of high volatility and a strong narrative-driven cycle, crypto assets are entering a distinctly different stage. As fiat system uncertainty rises, regulatory frameworks gradually take shape, and developments such as spot ETPs, stablecoin legislation, and institutional allocation reshape the way funds enter the crypto market.

The core conclusion proposed by Grayscale in the "2026 Digital Asset Outlook" is that the dominant force in the crypto market is shifting from the retail cycle to institutional capital. Prices are no longer primarily driven by emotional FOMO spikes but more by compliant channels, long-term funds, and sustainable fundamentals, weakening the narrative of the "four-year cycle."

This article systematically outlines the ten major investment themes that may shape the market in 2026, from store of value, stablecoins, asset tokenization to DeFi, AI, and privacy infrastructure, outlining a crypto ecosystem gradually integrating into the mainstream financial system. The report also clearly indicates which hot topics are more like "noise" in the short term rather than decisive variables.

Below is the original text:

Key Takeaways

We expect that 2026 will accelerate a structural shift in digital asset investment, primarily driven by two themes: the increasing demand for alternative store of value tools at the macro level and significant improvement in regulatory clarity. The combination of both is expected to introduce new sources of funds, expand the adoption of digital assets (especially among wealth management advisors and institutional investors), and drive public blockchains to more comprehensively integrate into mainstream financial infrastructure.

Based on these trends, we believe that digital asset valuations in 2026 will generally rise, and the so-called "four-year cycle" (i.e., the theory that crypto market trends follow a fixed four-year rhythm) will come to an end. In our view, the price of Bitcoin is likely to set a new all-time high in the first half of the year.

Grayscale expects that bipartisan-supported structural crypto market legislation will officially become U.S. law in 2026. This will further deepen the integration between public blockchains and traditional finance, drive compliant trading of digital asset securities, and potentially allow startups and established enterprises to conduct on-chain issuance.

The outlook for the fiat currency system is becoming increasingly uncertain; in contrast, we can almost guarantee that the 20 millionth Bitcoin will be mined in March 2026. Against the backdrop of rising fiat currency risks, digital currency systems like Bitcoin and Ethereum, which possess transparent, programmable, and ultimately scarce supply features, are expected to see stronger demand.

We expect that in 2026, more crypto assets will be made available to investors through Exchange-Traded Product (ETP) formats. While these products have had a good start, many platforms are still conducting due diligence and advancing the integration of crypto assets into asset allocation processes. As this process matures, slow but substantial institutional funds are expected to continue entering the market in 2026.

We have also outlined the top ten crypto investment themes for 2026 to reflect the broadening applications of public blockchain technology. Each theme corresponds to relevant crypto assets:

1. USD Depreciation Risk Driving Demand for Currency Replacement Solutions

2. Regulatory Clarity Enhancement Supporting Digital Asset Adoption

3. Continued Expansion of Stablecoin Influence Post-GENIUS Act

4. Asset Tokenization Reaching a Key Inflection Point

5. Blockchain Moving Mainstream, Increased Demand for Privacy Solutions

6. Centralization Trend in AI, Calling for Blockchain-like Solutions

7. DeFi Accelerating, Led by Lending

8. Mainstream Adoption Driving Next-Generation Infrastructure Development

9. Increasing Focus on Sustainable Revenue Models

10. Investors Will Increasingly Seek Staking Yields by Default

Finally, we also point out two topics that are not expected to significantly impact the crypto market in 2026:

Quantum Computing: We believe that research and preparation for post-quantum cryptography will continue, but it is unlikely to affect market valuations in the next year.

Digital Asset Trust Companies (DATs): Despite receiving more media attention, we assess that they will not be a key variable shaping the digital asset market trends in 2026.

2026 Digital Asset Outlook: Dawn of the Institutional Era

Fifteen years ago, cryptocurrency was still an experimental endeavor: there was only one asset on the market, Bitcoin, with a market cap of around 1 million USD. Today, cryptocurrency has evolved into a nascent industry, growing into a medium-sized alternative asset class consisting of millions of tokens, with a total market cap of around 30 trillion USD (see Chart 1).

As major economies gradually establish a more comprehensive regulatory framework, the integration of public blockchain with the traditional financial system is deepening, continuously attracting capital inflows oriented towards long-term allocation to this market.

Figure 1: Cryptocurrencies Have Grown into a Medium-Sized Alternative Asset Class

Throughout the development of cryptocurrencies, token valuations have experienced four significant cyclical pullbacks, roughly following a rhythm of around every four years (see Figure 2). In three of these instances, the cyclical high points of valuations have occurred approximately 1 to 1.5 years after Bitcoin halving events, which themselves occur every four years.

The current bull market has lasted for over three years, with the most recent Bitcoin halving taking place in April 2024, over 1.5 years ago. Therefore, based on traditional experience, some market participants speculate that the Bitcoin price may have peaked in October, and 2026 will be a challenging year for cryptocurrency returns.

Figure 2: Upside Valuation in 2026 Will Mark the End of the "Four-Year Cycle" Theory

Grayscale believes that the cryptocurrency asset class is currently in a sustained bull market, and 2026 will be a key point in the so-called "four-year cycle" coming to an end. We anticipate that the valuations of the six major cryptocurrency sectors will see a comprehensive uptrend in 2026, and we assess that the Bitcoin price is likely to break previous all-time highs in the first half of the year.

Our optimism is mainly based on two core pillars:

First, there will continue to be demand at a macro level for alternative store-of-value instruments.

By market capitalization, Bitcoin and Ethereum are currently the two largest cryptocurrencies, seen as scarce digital commodities and alternative currency assets. Meanwhile, the fiat system (and assets priced in fiat) faces additional risks, with high and escalating public sector debt that could exert inflationary pressure over the medium to long term (see Figure 3).

In this context, scarce commodities, whether in physical form like gold and silver, or in digital form like Bitcoin and Ethereum, may act as a "ballast" hedge against fiat risks in a portfolio. In our view, as long as the risk of fiat depreciation continues to rise, the demand in portfolios for Bitcoin and Ethereum allocations is likely to increase in parallel.

Chart 3: US Debt Concerns Have Undermined Credibility of Low Inflation Expectations

Second, regulatory clarity is driving institutional funds into the public blockchain space.

This is easily overlooked, but up until this year, the US government was still investigating and/or suing multiple top firms in the crypto industry, including Coinbase, Ripple, Binance, Robinhood, Consensys, Uniswap, and OpenSea. Even today, exchanges and other crypto intermediaries lack clear, uniform regulatory guidance at the spot market level.

However, the situation is slowly but surely shifting.

In 2023, Grayscale won a lawsuit against the US Securities and Exchange Commission (SEC), paving the way for cryptocurrency spot exchange-traded products (ETPs);

In 2024, Bitcoin and Ethereum spot ETPs officially entered the market;

In 2025, the US Congress passed the GENIUS Act targeting stablecoins, and regulatory agencies began adjusting their stance on the crypto industry, emphasizing consumer protection and financial stability, collaborating with the industry, and providing clearer regulatory guidance;

In 2026, Grayscale expects Congress to pass bipartisan legislation on the crypto market structure, which is expected to institutionalize blockchain finance in the US capital markets at the institutional level and further drive ongoing institutional investment inflows (see Chart 4).

Chart 4: Increasing Funding Scale, Reflecting Growing Institutional Confidence

In our view, new funds entering the crypto ecosystem will primarily flow through spot ETPs. Since the listing of the Bitcoin spot ETP in the US in January 2024, global crypto ETPs have seen net inflows of around $87 billion (see Chart 5).

While these products have seen significant success early on, the process of integrating crypto assets into mainstream investment portfolios is still in its early stages. Grayscale estimates that less than 0.5% of the wealth managed by US trustees/advisors is allocated to crypto assets. As more investment platforms conduct due diligence, establish corresponding capital market assumptions, and incorporate crypto assets into model portfolios, this percentage is expected to continue to rise.

In addition to the wealth management channel, some pioneering institutions have already allocated crypto ETPs in their institutional portfolios, including Harvard Management Company and Mubadala, one of Abu Dhabi's sovereign wealth funds. We expect this list of institutions to significantly expand by 2026.

Figure 5: Crypto Spot ETP Continues to Attract Net Inflows

As the crypto market becomes increasingly driven by institutional inflows, the characteristics of price performance have also changed. In each previous bull market, the price of Bitcoin has surged by at least 1000% within a year (see Figure 6). In this current cycle, the highest year-over-year increase is approximately 240% (for the annual period ending March 2024).

We believe this difference reflects recent more robust and sustained institutional buying activity, rather than the chasing behavior driven by retail sentiment in past cycles. Although crypto asset investment still carries significant risks, at the time of writing this report, we assess the probability of a deep and prolonged cyclical drawdown to be relatively low. By contrast, driven by ongoing institutional inflows, there is a greater likelihood of a stable, progressive upward price trend, which is expected to become the dominant trend next year.

Figure 6: Bitcoin Price Has Not Experienced Sharp Surges in This Cycle

A relatively friendly macro market environment may also provide some cushion against downward price risks for tokens in 2026.

Looking back in history, the previous two cyclical peaks occurred during the Fed's interest rate hiking phase (see Figure 7). In contrast, the Fed has cut rates three times in 2025 and is expected to continue lowering rates next year.

Kevin Hassett, who is considered a possible successor to Jerome Powell as Fed Chair, recently stated on the "Face the Nation" program: "The American people can expect that President Trump will choose someone who will help them get cheaper car loans and make it easier to get a mortgage with lower rates."

Overall, economic growth combined with a loosely accommodative Fed policy environment typically favors boosting investors' risk appetite and creates potential upside for risk assets, including crypto assets.

Chart 7: Past Cyclical Peaks Often Coincide with Fed Rate Hikes

Similar to other asset classes, the price of crypto assets is also driven by fundamentals and fund flows. The commodity market exhibits cyclical characteristics, and crypto assets may also experience prolonged cyclical pullbacks at certain stages in the future. However, we believe that 2026 does not present such conditions.

From a fundamental perspective, the supporting factors remain strong: the macro-level continued demand for alternative store of value, as well as institutional fund inflows driven by improved regulatory clarity, are laying a long-term foundation for public blockchain technology. Meanwhile, new funds continue to enter the market. By the end of next year, crypto ETPs are likely to appear in more portfolios. This cycle has not seen a singular, concentrated retail frenzy, but instead, there is a sustained, stable demand for crypto ETPs from various portfolio types. In a overall macro environment that is leaning friendly, we believe this is a key condition for the crypto asset class to reach new highs in 2026.

Top 10 Crypto Investment Themes for 2026

Crypto assets are a highly diversified asset class, reflecting various use cases covered by public blockchain technology. The following section outlines Grayscale's assessment of the top ten crypto investment themes for 2026, along with two additional "red herrings." Under each theme, we list the tokens we find most relevant from our perspective. For the categorization of investable digital assets, refer to our Crypto Sectors framework.

Theme 1: Dollar Devaluation Risk Drives Demand for Currency Alternatives

Related Crypto Assets: BTC, ETH, ZEC

The U.S. economy is facing structural debt issues (refer to Chart 3), which may create long-term pressure on the U.S. dollar as a store of value. Other countries face similar challenges, but as the dollar remains the world's most important international currency, the credibility of U.S. policy is particularly critical for potential cross-border capital flows.

In our view, only a small fraction of digital assets have the feasibility to become a store of value, under certain conditions: widespread adoption fundamentals, highly decentralized network structures, and restricted supply growth. The most typical representatives are the two largest crypto assets by market capitalization—Bitcoin and Ethereum. Similar to physical gold, their value partly comes from their scarcity and autonomy.

The total supply of Bitcoin is permanently capped at 21 million and is entirely determined by programmatic rules. For example, we can be highly certain that the 20 millionth Bitcoin will be mined in March 2026. This transparent, predictable, and ultimately scarce digital currency system, while not complex in itself, is seeing increasing attractiveness in the current environment where fiat systems face tail risks. As long as the macro imbalance causing fiat risk continues to intensify, the demand in portfolios for alternative store-of-value assets may continue to rise (see Chart 8).

Furthermore, Zcash, as a decentralized digital currency with privacy features on a smaller scale, may also be suitable for portfolio allocation to hedge against USD depreciation risk (see Theme Five).

Chart 8: Macro Imbalance Likely to Drive Demand for Alternative Store of Value Tools

Theme Two: Enhanced Regulatory Clarity Supporting Widespread Adoption of Digital Assets

Related Cryptocurrencies: Virtually All

In 2025, the U.S. took a significant step toward clarifying crypto regulations, including: the GENIUS Act targeting stablecoins, revoking Staff Accounting Bulletin (SAB) 121 of the U.S. Securities and Exchange Commission (SEC) related to custodial accounting treatment, introducing broad listing standards for crypto ETPs, and addressing the crypto industry's access issues in the traditional banking system (see Chart 9).

Looking ahead to 2026, we anticipate a more decisive step—a bipartisan supported legislation for the crypto market structure. The U.S. House of Representatives passed its version of the bill, dubbed the "Clarity Act," in July, with the Senate subsequently starting their legislative process. While specific terms still need further negotiation, from the overall framework, this legislation will provide a set of rules for the crypto capital market benchmarked against traditional finance, covering registration and disclosure requirements, classification standards for crypto assets, and conduct norms for insiders.

On a practical level, a more comprehensive regulatory framework taking shape in the U.S. and other major economies implies that regulated financial institutions may formally integrate digital assets on their balance sheets and start transacting on the blockchain. Additionally, this is likely to drive on-chain capital formation—both startups and established firms may issue compliant on-chain tokens. By further unlocking the potential of blockchain technology, regulatory clarity is poised to holistically elevate the value proposition of the crypto asset class.

Given the potential importance of regulatory clarity in 2026 for driving the development of crypto assets, we believe that any significant bipartisan disagreement or breakdown in the relevant legislative process should be seen as a key downside risk.

Figure 9: The United States made significant progress in crypto regulatory clarity in 2025

Theme Three: With the GENIUS Act in Place, Stablecoin Influence Continues to Expand

Relevant Crypto Assets: ETH, TRX, BNB, SOL, XPL, LINK

In 2025, stablecoins experienced a true "breakout moment": their circulating supply had risen to around $300 billion, with an average monthly trading volume of about $1.1 trillion over the past six months as of November; at the same time, the U.S. Congress passed the GENIUS Act, leading to a significant influx of institutional capital into the space (see Figure 10).

Looking ahead to 2026, we expect these changes to translate into practical applications: stablecoins will be more widely integrated into cross-border payment services; used as collateral on derivative exchanges; appear on corporate balance sheets; and be adopted in online consumer payments as an alternative to credit cards. Additionally, the continued warming of the forecasted market may further drive the demand for stablecoins.

The ongoing growth in stablecoin trading volume will directly benefit the blockchain networks facilitating these transactions (such as ETH, TRX, BNB, SOL, etc.), while also driving the development of a range of complementary infrastructure (like LINK) and decentralized finance (DeFi) applications (see Theme Seven for details).

Figure 10: Stablecoins Experience a Key Breakout Period

Theme Four: Asset Tokenization Reaches a Key Inflection Point

Relevant Crypto Assets: LINK, ETH, SOL, AVAX, BNB, CC

From the current perspective, tokenized assets still represent a marginal share: they account for only about 0.01% of the total market value of the global stock and bond markets (see Figure 11). Grayscale anticipates that as blockchain technology matures and regulatory clarity continues to improve, asset tokenization will experience accelerated growth in the coming years.

In our view, by 2030, a 1000x increase in the scale of tokenized assets is not unimaginable. This expansion process is likely to create significant value for blockchain networks handling tokenized asset transactions and various supporting applications.

Currently, leading public blockchains in the field of tokenized assets include Ethereum (ETH), BNB Chain (BNB), and Solana (SOL), but this landscape may change in the future. In terms of oracle applications, Chainlink (LINK) is considered to have a particularly prominent competitive advantage due to its unique and comprehensive software technology stack.

Figure 11: Tokenized Assets Have Significant Growth Potential

Theme Five: Blockchain Going Mainstream, Increasing Demand for Privacy Solutions

Related Cryptocurrencies: ZEC, AZTEC, RAIL

Privacy is inherently a fundamental part of the financial system. Most people assume that their salary income, tax information, asset size, and spending behavior should not be publicly disclosed on a ledger. However, most current blockchains are designed to be highly transparent by default. If public blockchains are to be more deeply integrated into the financial system, a more mature and robust privacy infrastructure must be in place—and as regulation drives the convergence of blockchain and traditional finance, this becomes increasingly apparent.

Against the backdrop of increased investor concern about privacy, one of the potential beneficiaries is Zcash (ZEC): a decentralized digital currency structurally similar to Bitcoin but with built-in privacy features. Zcash saw a significant increase in the fourth quarter of 2025 (see Figure 12). Other important projects include Aztec (a privacy-focused Ethereum Layer 2 network) and Railgun (privacy middleware for DeFi).

Furthermore, we may also see mainstream smart contract platforms adopting "confidential transaction" mechanisms more widely, such as Ethereum's ERC-7984 standard and Solana's Confidential Transfers token extension. Simultaneously, the improvement of privacy tools may drive the DeFi sector to upgrade its identity verification and compliance infrastructure.

Figure 12: Cryptocurrency Investors' Focus on Privacy Features Is Increasing

Theme 6: AI Heading Towards Centralization, Calling for Blockchain-based Solutions

Related Crypto Assets: TAO, IP, NEAR, WORLD

The underlying alignment between cryptographic technology and artificial intelligence has never been as clear and strong as it is today. Currently, AI systems are gradually consolidating towards a few major corporations, triggering a series of concerns about trust, bias, and ownership; cryptographic technology, on the other hand, provides a set of primitive capabilities that can directly address these risks.

For example, decentralized AI development platforms like Bittensor aim to reduce reliance on centralized AI technologies; World offers verifiable Proof of Personhood, attempting to distinguish between real humans and intelligent agents in an environment rife with synthetic activity; and networks like Story Protocol provide transparent, traceable on-chain expressions of intellectual property in an era where the origin of digital content is increasingly difficult to identify. Meanwhile, tools like X402, a zero-fee stablecoin payment open layer built on Base and Solana, enable the low-cost, instant microtransaction capabilities required for economic interactions between intelligent agents or between machines and humans.

These elements together form the early infrastructure of the so-called "agent economy": in this system, identity, computing power, data, and payments must all possess verifiable, programmable, and censorship-resistant characteristics. Although the current ecosystem is still in its early stages and development is uneven, the intersection of cryptography and AI remains one of the most visionary application directions in the entire industry. As AI becomes more decentralized, autonomous, and economically capable, the protocols that are building real infrastructure are poised to be potential beneficiaries (see Chart 13).

Chart 13: Blockchain's Partial Key Risk Mitigation Pathway for AI

Theme 7: DeFi Accelerates, Led by the Lending Track

Related Crypto Assets: AAVE, MORPHO, MAPLE, KMNO, UNI, AERO, RAY, JUP, HYPE, LINK

Driven by the dual forces of technological maturity and regulatory improvement, DeFi applications significantly accelerated in 2025. The growth of stablecoins and tokenized assets is one of the most prominent success stories, but at the same time, the DeFi lending sector also saw substantial expansion, led by protocols such as Aave, Morpho, and Maple Finance (see Figure 14).

Simultaneously, decentralized perpetual contract exchanges (such as Hyperliquid) have consistently approached or even rivalled some large centralized derivatives exchanges in metrics such as open interest and daily trading volume. Looking ahead, as liquidity increases, cross-protocol interoperability strengthens, and the connection to the real-world price system becomes closer, DeFi is gradually becoming a trusted alternative for users who wish to conduct financial activities directly on-chain.

We expect to see more DeFi protocols collaborating with traditional fintech companies to leverage their mature infrastructure and existing user base. In this process, core DeFi protocols are likely to continue benefiting—including lending platforms (such as AAVE), decentralized exchanges (such as UNI, HYPE), and related infrastructure protocols (such as LINK); at the same time, the public chain networks (e.g., ETH, SOL, BASE) that host most DeFi activities will also benefit in parallel.

Figure 14: Continuous Expansion of DeFi Scale and Form, Ecosystem Increasingly Diverse

Theme 8: Next-Generation Infrastructure Upgrade Driven by Mainstream Adoption

Related Cryptocurrencies: SUI, MON, NEAR, MEGA

The next generation of blockchains is continuously pushing the technological boundaries forward. However, some investors believe that additional block space is not currently needed, as the demands of existing public chains have not been fully met. Solana was once a typical case of this skepticism: as a high-performance but underutilized blockchain, it was seen as "excessive block space" until the subsequent wave of applications arrived, transforming it into one of the most successful examples in the industry.

Not all current high-performance public chains will replicate Solana's path, but we believe that a few projects are likely to achieve breakthroughs. Outstanding technology does not necessarily lead to adoption, but the architecture of these next-generation networks equips them with unique advantages in emerging application scenarios, such as AI micro-payments, real-time gaming loops, high-frequency on-chain transactions, and intent-based systems.

In this cohort, we expect Sui to stand out, leveraging its clear technological leadership and highly integrated development strategy (see Chart 15). Other notable projects include Monad (parallelized EVM architecture), MegaETH (high-speed Ethereum Layer 2 network), and Near (an AI-focused blockchain making progress on its Intents product).

Chart 15: Next-generation blockchains like Sui enable faster, lower-cost transaction experiences

Theme Nine: Increasing Focus on Sustainable Revenue Streams

Related Cryptocurrencies: SOL, ETH, BNB, HYPE, PUMP, TRX

While blockchains are not traditional enterprises, they have quantifiable fundamental metrics, including user count, transaction volume, fees, total value locked (TVL), developer scale, and application ecosystem. Among these metrics, Grayscale believes that transaction fees are the most valuable single fundamental metric because they are the hardest to manipulate and offer higher comparability across different blockchains (while also demonstrating the best empirical fit).

From a traditional corporate finance perspective, transaction fees can be likened to "revenue." For blockchain applications, it is necessary to further distinguish between protocol-layer fees/revenue and "supply side" fees/revenue. As institutional investors begin systematically allocating to crypto assets, we expect them to pay closer attention to blockchains and applications with high transaction fee revenue levels or clear growth trends (excluding Bitcoin).

Currently, among smart contract platforms, those with relatively high fee revenue include TRX, SOL, ETH, and BNB (see Chart 16); and among application layer assets, projects with high revenue performance include HYPE, PUMP, and others.

Chart 16: Institutional investors may take a stricter look at blockchain fundamental performance

Theme Ten: Investors Will Default to Staking

Related Cryptocurrencies: LDO, JTO

In 2025, U.S. policymakers made two key adjustments regarding the staking mechanism, paving the way for more token holders to participate in staking activities:
(1) The U.S. Securities and Exchange Commission (SEC) **explicitly stated that liquid staking activity does not constitute securities trading;
(2) The U.S. Internal Revenue Service (IRS) and Treasury Department confirmed that investment trusts and Exchange-Traded Products (ETPs) can stake digital assets.

Regulatory guidance around liquid staking services is expected to directly benefit Lido and Jito—both leading liquid staking protocols in the Ethereum and Solana ecosystems, respectively, based on Total Value Locked (TVL). From a broader perspective, the ability for crypto ETPs to participate in staking is likely to make "staking as a default holding method" the standard structure for Proof of Stake (PoS) token investments, thereby increasing the overall staking ratio and exerting some downward pressure on staking rewards (see Chart 17).

In an environment where staking is more widely adopted, custody staking through ETPs will provide investors with a convenient way to earn staking rewards; meanwhile, on-chain, non-custodial liquid staking will have a unique advantage in terms of composability within the DeFi ecosystem. We expect this dual-track coexistence structure to persist for quite some time.

Chart 17: Proof of Stake (PoS) Tokens with an Inherent Staking Reward Mechanism

2026 Red Herrings

We expect that all of the above investment themes will have a tangible impact on the crypto market's development in 2026. However, there are two topics that, despite high levels of discussion, we do not believe will substantially sway the crypto market's trajectory next year: the potential threat of quantum computing to cryptography and the evolution of Digital Asset Trusts (DATs). While these two topics will garner considerable attention, we view them as not being core variables determining the market outlook.

About Quantum Computing

If advances in quantum computing technology continue, most blockchains will eventually need to upgrade their cryptographic systems. In theory, a powerful enough quantum computer could reverse-engineer private keys from public keys, thereby generating valid digital signatures and transferring user assets. Therefore, Bitcoin and most blockchains, as well as the entire modern economy relying on cryptography, will need to transition to post-quantum cryptographic tools in the long run. However, experts generally believe that a quantum computer with the capability to break Bitcoin's cryptography may not emerge until after 2030 at the earliest. We expect that research and community-level preparation around quantum risk will accelerate in 2026, but this theme is unlikely to have a substantial price impact in the short term.

About Digital Asset Treasury Companies (DATs)

Michael Saylor's strategy of "Incorporating Digital Assets into Corporate Balance Sheets" has led to dozens of imitators by 2025. According to our estimates, DATs currently hold 3.7% of the total Bitcoin supply, 4.6% of Ethereum, and 2.5% of Solana. However, since the peak in mid-2025, the market demand for such instruments has cooled off: the largest DAT's mNAV (market value/net asset value) has now dropped to near the 1.0 level (see Chart 18).

It is worth noting that most DATs have not adopted excessive leverage (or even any leverage at all), so they are less likely to be forced to sell assets in a market downturn. The largest DAT by market value, Strategy, has recently even established a USD reserve fund to ensure continued payment of its preferred stock dividends even if the Bitcoin price falls. We expect that the behavior of most DATs will be more akin to closed-end funds: trading within a range around net asset value, occasionally trading at a premium or discount, but rarely actively liquidating assets.

Overall, these instruments are likely to become a long-term part of the crypto investment landscape. However, in our view, they are unlikely to be a significant source of new token demand in 2026 or a major source of selling pressure.

Chart 18: DAT Premium Levels Have Converged Significantly, but the Likelihood of Large-Scale Asset Sales is Low

Conclusion

We are optimistic about the outlook for digital assets in 2026, driven by the resonance of two forces: the ongoing demand for alternative value storage tools at a macro level and the continuous improvement in regulatory clarity. The key theme next year is likely to be the further deepening connection between blockchain finance and traditional finance, as well as the continued inflow of institutional capital. Tokens adopted by institutions often have clear use cases, sustainable revenue models, and access to compliant trading venues and application systems. Investors can also expect the range of crypto assets investable through ETPs to continue expanding and staking mechanisms to be enabled by default where conditions allow.

At the same time, regulatory clarity and institutionalization processes will raise the bar for mainstream success. For example, crypto projects looking to enter regulated exchanges may need to meet new registration and disclosure requirements. Institutional investors are also more likely to overlook crypto assets that lack a clear use case—even if these assets currently have relatively high market capitalization. The GENIUS Act legally distinguishes regulated payment-type stablecoins (entitled to corresponding rights and obligations under U.S. law) from other stablecoins (lacking equivalent rights). Similarly, we expect that the institutional era of crypto assets will further widen the gap between assets that can access compliant channels and connect with institutional capital and those assets that cannot gain equal access.

The crypto industry is entering a new phase, and not every token is able to smoothly transition from the old era to the new era.

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