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Will the Cryptocurrency Industry Thrive in 2026?

2025-12-19 10:09

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This article will discuss the direction of the cryptocurrency industry after a structural shift.

Original Article Title: "Will the Crypto Industry Be Good in 2026?"

Original Article Author: Viee Xiaowei, Biteye

In the last few months of 2025, a bearish atmosphere began to spread.

Bitcoin slipped from its high of $120,000, ETF inflows were temporarily interrupted, various coins showed divergent trends, and meme coins that once ignited emotions also began to be ignored. Unlike the sudden regulatory crackdown seen at the end of 2021, and apart from the major flash crash on 1011, there did not seem to be a severe liquidity crisis, yet something still felt amiss.

If the cryptocurrency world in 2025 was a recalibration of true and false value, will the crypto industry be good in 2026?

This article attempts to find an answer. Perhaps we need to accept a fact: the cryptocurrency industry may be entering an era that no longer relies on unilateral price increases or is primarily driven by a "casino narrative."

1. Macroeconomic Trends Are Improving, Bitcoin Still Riding the Wave

Over the past year, both Bitcoin's price performance and market positioning have undergone significant changes.

After surging to a historic high of $120,000, the market began to decline, volatility increased, and market sentiment gradually cooled. Unlike previous rallies driven by retail investors, the main force behind this rally was institutional funds behind ETFs. From the perspective of average entry price, CryptoQuant analyst Axel Adler Jr. pointed out last month that the average entry price of U.S. ETFs is $79,000, which many consider to be one of the price support zones. Therefore, Bitcoin's current trend is increasingly resembling a high-volatility institutional asset, with a positioning similar to gold's inflation hedge on the one hand and exhibiting beta properties influenced by macro sentiment and risk appetite like tech stocks on the other.

From a broader perspective, 2025 was a year of improved global risk asset sentiment. AI was a major theme, the U.S. stock market continued to hit new highs, and the Federal Reserve announced three interest rate cuts in December, leading the market back into a phase of improving liquidity expectations. The FOMC's year-end economic forecast showed that the expected GDP growth rate for the U.S. in 2026 was revised upward from 1.8% to 2.2–2.5%. There is a general expectation that next year will continue to be accommodative, which may bode well for assets like Bitcoin.

However, the market is not without risks. If the global economy unexpectedly weakens in 2026 or if inflation unexpectedly rebounds, risk assets may still face significant adjustments.

2. Regulatory Turning Point: US and Hong Kong Policy Trends

Another significant change in 2025 was the formalization of regulation.

In the United States, two key bills were passed. The first one was the Stablecoin Act (GENIUS Act), which defined stablecoins, outlined reserve requirements, and set issuance qualification thresholds, providing a compliance pathway for major stablecoin issuers. This act was signed into law by the president in July 2025 and will come into effect 18 months after signing or 120 days after regulatory agencies release final rules. The second one was the Crypto Asset Market Structure Act (CLARITY Act), which systematically delineated the boundaries between "security-type tokens" (regulated by the SEC) and "commodity-type tokens" (regulated by the CFTC) and proposed a tiered regulatory framework. This act is set to be submitted to the Senate in January and may require presidential signature, with the effective date to be determined. Meanwhile, the SEC is accelerating the approval of more crypto ETFs, opening the path for institutional products.

In Hong Kong, regulatory efforts are also ramping up. In 2025, the HKMA introduced a regulatory regime for stablecoin issuers, requiring all Hong Kong-related stablecoin issuers to be licensed. This means that in the future, issuing stablecoins pegged to currencies like the US dollar or Chinese yuan in Hong Kong will require meeting certain capital and compliance requirements. In addition, HashKey has been listed on the Hong Kong Stock Exchange, becoming the first compliant platform with a core business in crypto trading to IPO in Hong Kong, marking a milestone.

Overall, the regulatory trends in the United States and Hong Kong are aimed at not only curbing illegal speculation but also opening up pathways for legal business, driving the industry towards institutionalization and compliance.

3. Stablecoins, Prediction Markets, On-chain Stocks: Three Major Themes

Over the past few years, the most stable growth curve in the crypto industry has actually been stablecoins.

By 2025, the global stablecoin issuance has exceeded $300 billion, with USDT and USDC, the two major stablecoin types, accounting for over 80%. Stablecoins are becoming part of the global payment network, with use cases for USDT and USDC already permeating daily merchant transactions and cross-border settlements.

In 2026, stablecoins are likely to be even closer to the real world. Traditional giants like Visa, Stripe, and PayPal are already settling transactions using stablecoins. For example, Stripe now supports merchants' subscription payments with stablecoins, with real-world services already implemented.

Image Source: a16z

In addition, as regulation becomes clearer, sovereign-backed stablecoins (backed by high-quality assets) are expected to emerge, along with regional stablecoins such as the digital currency bridge projects implemented by Japan and the European Union.

Another aspect worth paying attention to is prediction markets.

Originally, most people considered prediction markets to be niche products or non-compliant. However, now it is evolving into a combination of "on-chain betting + pricing tool" under themes such as the U.S. presidential election, sports matches, and economic data.

For example, Kalshi has obtained an official futures license from the U.S. CFTC, allowing it to legally launch prediction trades related to macroeconomic data. Its current valuation has soared to $11 billion. Meanwhile, Polymarket has become a hub for a large number of users to bet on and gauge public sentiment around topics like the U.S. presidential election and entertainment events.

In 2026, prediction markets may move beyond pure speculation circles. For instance, users may not only bet on outcomes but also use money to vote, expressing their judgment of the probability of a certain result. This collective wisdom pricing method could be used by media, research institutions, and even trading strategies as a reference. Additionally, AI will open up new possibilities for prediction markets, enabling them to not only rely on human bets but also automatically analyze data, place orders, and even create new betting options. This will make prediction markets more responsive and intelligent, gradually transforming them into tools for assessing risk and trends rather than just places for betting on outcomes.

Lastly, the development of tokenized stocks on the blockchain is another undeniable trend.

Simply put, the crypto industry is now not only trading crypto assets but also starting to bring real-world assets onto the blockchain. For example, the company Securitize plans to launch the first fully compliant tokenized stock trading platform in 2026. Tokens purchased on the blockchain represent real company stocks, allowing holders to have voting rights and receive dividends.

IV. Emergent Narratives: New Directions that Might Take Flight in 2026

Meanwhile, some seemingly more fringe directions are also worth noting. The following content is referenced from the article "a16z: 17 Structural Changes in the Crypto Industry."

https://a16zcrypto.com/posts/article/big-ideas-things-excited-about-crypto-2026/

Image Source: a16z

1. Identity Challenge of AI Agents

As AI agents start engaging in transactions, browsing, placing orders, and even interacting with smart contracts, a key issue arises: how can these non-human identities prove "who they are"?

The concept of "Know Your Agent" (KYA) proposed by a16z aims to address this issue. On-chain, any agent looking to initiate a transaction must have clear permissions and ownership, requiring credentials with encrypted signatures to transact. By 2026, this may become a prerequisite for the widespread deployment of on-chain AI.

2. x402 Protocols and Micropayments

a16z predicts that as AI agents engage in extensive data exchanges, leverage computing power, and interact with APIs, we will enter an era of "automated settlement + programmatic payments."

No longer reliant on manual payments, AI agents can identify needs and autonomously facilitate payments, a reality that protocols like x402 are addressing. In 2026, their presence will become increasingly pronounced.

3. Increased Focus on Privacy Chains

a16z highlights a key trend: compared to performance-driven convergence, privacy will become the core moat of future public blockchains. While in the past, privacy chains were viewed as hindrances to regulation due to their lack of transparency, the tables have turned. Now, the issue is that business data is too sensitive; without privacy protection, regulatory bodies are hesitant to utilize on-chain solutions. Consequently, chains that inherently prioritize privacy are gaining attractiveness. Once users adopt these chains, data remains secure, migration costs increase, and a new form of user stickiness emerges through network effects.

4. Staked Media

In an era where AI generates vast amounts of content, determining the credibility of a statement requires looking not only at who said it but also at the cost associated with making that statement. Therefore, a16z introduces a new media model where content creators not only express opinions but also "stake" their positions through mechanisms such as locking tokens, prediction markets, and NFT credentials.

For example, if you post a bullish view on ETH, you also simultaneously lock up your own ETH as collateral; if you make an election prediction, you also place a bet on the chain. These publicly tied interests will make content more than just lip service. If this gameplay can be successfully implemented, it may become the new norm for on-chain media.

Of course, the directions proposed in the a16z report go far beyond these few examples. This article focuses on four trends that we believe are more representative, while other directions are equally worth paying attention to, such as: stablecoin on/off-ramp upgrades, RWA encryption nativeization, stablecoin-driven upgrade of bank ledger systems, wealth management diversification, the rise of AI research assistants, real-time content sharing mechanism of AI agents, decentralized post-quantum communication, "privacy as a service" becoming infrastructure, DeFi security paradigm shift, intelligent prediction markets, verifiable cloud computing, emphasis on Product-Market Fit (PMF), and crypto regulations unlocking more blockchain potential.

Interested readers can refer to the original a16z report for further in-depth understanding.

5. The Crypto Industry is Breaking Out of its Internal Loop

The early growth of the crypto industry was mostly built within a self-referential system, where coin issuance, referrals, and airdrops all attempted to attract more insiders to stay. However, this closed loop is gradually being broken by reality.

From Polymarket to USDT, and then to the cross-border applications of USDC, we see more and more people who are not Web3 users using blockchain tools. Street vendors in Lagos may not understand wallet structures, but they know that using USDT is much faster than banking transfers. In high inflationary countries, depositors flock to USDC for hedging rather than speculation. One of the most obvious changes is seen in payment scenarios in developing countries, such as the partnership between the trading platform Coins.ph in the Philippines and Circle to open a low-cost USDC remittance channel.

This underlying trend indicates that cryptographic technology is embedding itself in real-world scenarios such as cross-border payments and remittance channels. The true future of crypto may lie in how to use technology to solve real problems and make more ordinary people unconsciously start using blockchain.

6. The Crypto Industry from a KOL Perspective

The recent discussion about whether spending years in the crypto industry is worthwhile is essentially a collective retrospective of the industry.

Castle Island Ventures partner Nic Carter @nic_carter continued the reflection on "whether spending 8 years in crypto is a waste," admitting that only Bitcoin, stablecoins, DEXs, and prediction markets have truly achieved significant PMF to this day. He chooses to maintain a pragmatic idealism, accepting that bubbles and frenzies are part of the path, not the whole.

Dragonfly Partner Haseeb @hosseeb put it more bluntly, pointing out that the issue is not the existence of the casino, but rather that by only focusing on the glamour of the casino, one would miss the industry's true transformation. He believes that cryptocurrency is a better vessel for finance, one that will forever change the nature of money. He hopes the industry maintains patience: "The Industrial Revolution also took 50 years to change productivity, and we are only 15 years in."

XHunt & Biteye Founder @DeFiTeddy2020's summary is also very realistic. In his view, the crypto industry can quickly expose the essence of finance, facing zeroing projects, detachment of price from fundamentals, and even insider trading, manipulation, and rug pulls. It is not a breeding ground for idealism but a market that educates participants with real money continually, very much toughening the mindset.

Looking ahead to the future direction of the industry, KOL Crypto Goddess @xincctnnq provides a long-term perspective. What cryptocurrency is truly trying to address is the long-term issues of the monetary system, contract execution, digital ownership, capital market efficiency, and financial inclusion. Even if the outcome is distant and the process rough, it is worth constantly trying.

Furthermore, Trader & Analyst @CryptoPainter offers a more market structure-oriented explanation. The crypto market repeats its consistent operational mechanism, "Value Investment" - "Faith Investment" - "Emotional Speculation" - "Utter Disappointment," and then starts over again. This cycle has occurred in 2018, 2022, and is destined to happen again. Gamblers and the casino are not anomalies but rather part of consuming bubbles and completing market self-adjustment.

Figment Capital member DougieDeLuca @DougieDeLuca's position, on the other hand, seems like a phased summary. He bluntly states that "Crypto is dead" does not mean that the price is zero or the blockchain has stopped working. Instead, it means "Crypto as a closed industry form is dying," and true success should be integrating Crypto technology into the everyday lives of ordinary people.

From a more institutional perspective, KOL & Researcher Blue Fox @lanhubiji mentioned that as old users begin to exit, newcomers from traditional finance backgrounds are entering. In their understanding, crypto is a long-term trend that has already entered a path of standardization, interoperability, and scalability. Three years later, a brand-new era of on-chain finance, an on-chain Wall Street era, will gradually emerge.

Meanwhile, LD Capital Founder Jack Yi Hua @Jackyi_ld's assessment is more closely related to the current cycle. He points out that the recent downturn in crypto is more of a temporary resonance of liquidity and macro events. Currently, negative factors are gradually dissipating, and with the dual positive factors of interest rate cuts and crypto-friendly policies, he continues to be optimistic about the subsequent market.

At a more macro level of regulation and industry structure, Hashkey Group Chairman Xiao Feng's judgment is particularly systematic, as he has put forward three major trends for the future:

First, the global trend of crypto regulation is shifting from "voluntary acceptance" to "mandatory compliance," with governments around the world gradually eliminating offshore gray areas and moving crypto transactions towards licensing. For example, in Hong Kong, China, starting from June 2023, all unlicensed trading platforms must exit the market.

Second, crypto is no longer limited to native assets like BTC and ETH; more traditional financial assets are being tokenized and moving onto the blockchain to create a regulated and compliant new tokenized securities market.

Third, from "off-chain" to "on-chain," he predicts that the latter half of 2026 may be a key turning point for the emergence of the "Wall Street on the blockchain."

7. Conclusion

Will crypto be better in 2026?

If you are expecting a "meteoric rise in prices," the answer may be uncertain.

But if you are asking whether this industry is heading towards a more realistic and useful direction, the answer may be affirmative.

From crypto ETFs to stablecoin payments, from on-chain national debts to prediction markets, from on-chain Agents to decentralized AI, all these indicate one thing:

The crypto industry may be starting to land in a more real-world direction, and perhaps it will increasingly resemble a twin financial system running parallel to the real-world financial system, resonating with the stock market, macro liquidity, policy expectations, and even AI cycles.