Will the Crypto Industry Thrive in 2026?

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This article will discuss where the cryptocurrency industry is headed after the structural upheaval.

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

Original Article Author: Viee Xiao Wei, Biteye

In the final months of 2025, a bearish sentiment began to spread.

Bitcoin slipped from its high of $120,000, ETF inflows momentarily stalled, various coins had diverging trends, and even the once popular meme coins began to be ignored. Unlike the sudden regulatory crackdown seen at the end of 2021, and apart from the major crash in October, there didn't seem to be a severe liquidity crisis, yet something still felt amiss.

If we were to say that 2025 in the crypto world was a revaluation of true and false value, then will 2026 be good for crypto?

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

I. Macro Trends Warming Up, Bitcoin Still Riding the Wave

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

After reaching a historical high above $120,000, the market began to decline, volatility increased, and market sentiment gradually cooled. Unlike past rallies driven by retail investors, the driving force behind this upward trend was institutional funds behind ETFs. Looking at the average holding cost of U.S. ETFs, CryptoQuant analyst Axel Adler Jr. pointed out last month that the average holding cost was $79,000, which many consider to be one of the support levels for the price. Therefore, Bitcoin's current trend is increasingly resembling a high-volatility institutional asset, with a position similar to gold in terms of inflation resistance and yet showing beta-like characteristics influenced by macro sentiment and risk appetite, akin to tech stocks.

From a broader perspective, 2025 was a year of global risk asset sentiment warming up. AI dominated the scene, the U.S. stock market continually hit new highs, and the Federal Reserve announced three rate cuts in December, signaling a return to positive liquidity expectations in the market. The FOMC's end-of-year economic forecasts showed that the projected GDP growth rate for the U.S. in 2026 had been revised upward from 1.8% to 2.2%–2.5%. The general expectation is that the next year will continue to be accommodative, which could bode well for assets like Bitcoin.

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

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

Another significant change in 2025 is the formalization of regulation.

In the US, two key bills were passed. The first is the Stablecoin Act (GENIUS Act), which defines stablecoins, sets reserve requirements, and establishes issuance qualifications, providing a compliant path for major stablecoin issuers. This act was signed into law by the president in July 2025 and will take effect 18 months after signing or 120 days after regulatory agencies publish final rules. The second is the Cryptocurrency Market Structure Act (CLARITY Act), which systematically distinguishes between "security-type tokens" (regulated by the SEC) and "commodity-type tokens" (regulated by the CFTC), proposing a tiered regulatory framework. This act will be submitted to the Senate in January and may require presidential signature, with the effective date to be determined. At the same time, the SEC is expediting the approval of more cryptocurrency ETFs, opening the door for institutional products.

In Hong Kong, regulatory efforts are also accelerating. In 2025, the HKMA introduced a stablecoin issuer regulatory regime, requiring all Hong Kong-based stablecoin issuers to be licensed. This means that in the future, issuing stablecoins such as USD or RMB in Hong Kong will require meeting certain capital and compliance requirements. In addition, HashKey has been listed on the HKEX, becoming the first compliant platform with a core business in cryptocurrency trading to IPO in Hong Kong, marking a milestone.

Overall, the regulatory trends in the US and Hong Kong are both aimed at curbing illegal speculation while opening up pathways for legal businesses, driving the industry towards institutionalization and compliance.

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

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

By 2025, the global stablecoin issuance has exceeded $300 billion, with USDT and USDC together accounting for over 80%. Stablecoins are becoming part of the global payment network, with use cases of these stablecoins penetrating everyday merchants and cross-border settlements.

In 2026, stablecoins are likely to be closer to the real world than ever before, with traditional giants like Visa, Stripe, and PayPal already settling with stablecoins. For example, Stripe already supports merchants to subscribe using stablecoins, with real-world services already implemented.

Image Source: a16z

Furthermore, with clearer regulations, national 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 noteworthy development is in the prediction markets.

Initially, prediction markets were seen by most as too niche or non-compliant. However, they are now evolving into a combination of "on-chain betting + pricing tool" in themes such as the U.S. elections, sports events, and economic data.

For example, Kalshi, holding an official futures license from the U.S. CFTC, can legally offer prediction trades related to macroeconomic data. Its current valuation has risen to $11 billion. Additionally, Polymarket, focusing on topics like the U.S. elections and entertainment events, has become a platform where a large number of users place bets and gauge public sentiment.

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

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

In essence, the crypto industry is now not only trading crypto assets but also tokenizing real-world assets. For example, the company Securitize plans to launch the first fully compliant on-chain stock trading platform in 2026. Users can purchase tokens on the blockchain that correspond to actual company stocks, enabling them to have voting rights and dividends.

IV. Emergent Narratives: New Directions Taking Flight in 2026

Simultaneously, some seemingly more fringe directions are worth paying attention to. 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 Problem of AI Agents

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

The concept of "Know Your Agent" (KYA) proposed by a16z is precisely aimed at addressing 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 could become a prerequisite for the large-scale deployment of AI on-chain.

2. x402 Protocols and Micropayments

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

No longer requiring manual payments, AI agents can identify needs between each other and automatically execute payments, which is the real-world problem that protocols like x402 are addressing. By 2026, their presence will become increasingly prominent.

3. Increased Focus on Privacy Chains

a16z points out a key trend: compared to performance competitive convergence, privacy will become the core moat of future public chains. In the past, people were concerned that privacy chains were not conducive to regulation and lacked transparency. But now the issue has been reversed—business data is too sensitive, and without privacy protection, regulatory bodies dare not put it on the chain. It is for this reason that chains that inherently come with privacy protection are becoming attractive. Once users adopt these chains, data will not easily leak, and the migration cost is higher, naturally forming new user stickiness, which is actually a network effect.

4. Staked Media

In an era where AI generates a large amount of content, determining the credibility of a statement cannot solely rely on who said it but also on whether there is a cost to their statement. Therefore, a16z proposes a new media model where content creators not only speak but also "stake" their positions through mechanisms such as staking, prediction markets, NFT credentials, and more.

For example, you put forth a bullish view on ETH and also simultaneously lock up your own ETH holdings as collateral; you make an election prediction and also place a bet on-chain. These public interest linkages will make content more than just lip service. If this kind of gameplay can be realized, it may become the new norm for on-chain media.

Of course, the directions outlined in the a16z report are far more than just these few. This article focuses on 4 of the trends that we believe are more representative for further elaboration, while other directions are equally worthy of attention, such as: stablecoin on/off-ramps upgrade, RWA encryption nativeization, stablecoins driving bank ledger system upgrades, diversified wealth management, rise of AI research assistants, real-time content sharing mechanism with 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 of blockchain's potential.

Interested readers can refer to the original a16z report for a deeper understanding.

Five, The Crypto Industry is Breaking Out of Its Echo Chamber

The early growth of the crypto industry was mostly built within a self-referential system, where coin issuance, commissions, airdrops were all trying to attract more insiders to stay, but 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 necessarily understand wallet structures, but they know that using USDT is much faster than a bank transfer, and in high inflation countries, depositors flock to USDC just for hedging, not speculation. One of the most obvious changes can be seen in the payment scenes in developing countries, such as the partnership between the Philippine trading platform Coins.ph and Circle, opening low-cost USDC remittance channels.

This underlying trend indicates that crypto technology is embedding into real scenarios such as cross-border payments, remittance channels, etc. The true future of crypto may lie in how to use technology to solve real problems, allowing more ordinary people to unconsciously use blockchain.

Six, The Crypto Industry from the Perspective of KOLs

The recent discussion on "whether spending years in the crypto industry is worth it" 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 the only significant PMF achievements to date are still Bitcoin, stablecoins, DEX, and prediction markets. He chooses to maintain a practical idealism, accepting that bubbles and hype are part of the journey, not all of it.

Dragonfly partner Haseeb @hosseeb put it more bluntly, pointing out that the issue is not the existence of a casino, but rather that if you only focus on the glitz of the casino, you will 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 took 50 years to change productivity; we are only 15 years in."

XHunt & Biteye founder @DeFiTeddy2020 also provided a very real summary. In his view, the crypto industry can quickly expose the essence of finance, facing project resets, price disconnects from fundamentals, and even insider deals, manipulation, and rug pulls. It is not a hotbed of idealism but a market that educates participants with real money, constantly sharpening their minds.

Looking towards the future direction of the industry, KOL Coin Circle Goddess @xincctnnq offered a long-term perspective. The core issues that crypto is truly trying to address are the monetary system, contract execution, digital property rights, capital market efficiency, and financial inclusion. Even if the results are distant and the process is rough, it is worth continually striving for.

Furthermore, trader & analyst @CryptoPainter provided a more market structure-oriented explanation. The crypto market repeats its consistent cycle: "Value Investing" -> "Faith Investing" -> "Emotionally-Driven Speculation" -> "Utter Despair," and then starts over. This cycle has occurred in 2018 and 2022 and is destined to repeat. Gamblers and the casino are not anomalies but rather a part of consuming the bubble and completing the market's self-adjustment.

Figment Capital member DougieDeLuca @DougieDeLuca's stance was more of a phased summary. He stated plainly that "Crypto is dead" does not mean that the price is zero or that the blockchain has stopped working, but rather that "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 financial 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 new era of on-chain finance, an era of on-chain Wall Street, will gradually emerge.

LD Capital founder Jack Yi Hua @Jackyi_ld's assessment is more relevant to the current cycle. He pointed out that the recent crypto downturn is more of a temporary resonance of liquidity and macro events. Currently, negative factors are gradually being digested, and with the dual bullish factors of interest rate cuts and crypto-friendly policies, he remains optimistic about the subsequent market trend.

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

First, the global trend of crypto regulation is shifting from "voluntary acceptance" to "mandatory supervision," with governments around the world gradually eliminating offshore gray areas and moving crypto transactions towards licensing. For example, in Hong Kong, China, starting 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 migrating to the blockchain through tokenization, forming a new type of securitized market that complies with regulations.

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

Chapter 7: Conclusion

Will crypto be better in 2026?

If the expectation is for "soaring coin prices," then the answer may be uncertain.

However, if the question is whether this industry is moving towards a more real and useful direction, then the answer may be affirmative.

From crypto ETFs to stablecoin payments, from on-chain government bonds 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 the AI cycle.