Supercycle Begins? Fidelity's 2026 Cryptocurrency Market Outlook

Original Author: Fidelity Investments

Original Compilation: Nicky, Foresight News

TL;DR:

Investors looking to enter the market expecting short-term gains might want to be cautious. However, those planning to hold for the long term may not have missed the boat yet. This year, more governments and corporations worldwide have added digital assets to their balance sheets. Due to this new demand, some investors believe the traditional four-year crypto cycle may be over.

In March, President Trump signed an executive order establishing a strategic Bitcoin reserve for the U.S. government. The order formally designated all Bitcoin and several other cryptocurrencies currently held by the government as reserve assets.

While the full impact of this executive order remains to be seen, 2025 made one thing clear: cryptocurrency is gaining mainstream acceptance. It is no longer seen merely as a volatile form of speculation by "degens" (short for "degenerate," a term crypto traders use to describe themselves due to the wild nature of the crypto market and the mindset required to survive in it), but as a store of value recognized by the U.S. government.

What does this mean for the crypto market as we head into 2026? Does the significant price pullback we're currently seeing mean the bull run is over? Is it too late to invest in crypto now? Here are several key trends to watch.

Will More Countries Adopt Crypto Reserves?

Many countries around the world currently hold some amount of cryptocurrency, but few have formally established crypto reserves—designating their crypto holdings as financial assets serving a strategic national interest.

This began to change in 2025 (most notably with President Trump's March executive order) and could continue to progress in 2026.

For example, in September, Kyrgyzstan passed a bill to establish its own cryptocurrency reserve. Elsewhere, more countries are beginning to explore the possibility. Brazil's Congress recently advanced a bill that would allow up to 5% of the country's international reserves to be held in Bitcoin (though whether it will become law remains to be seen).

"Fidelity Digital Assets believes more countries may buy Bitcoin in the future, driven by game theory," said Chris Kuiper, Vice President of Research at Fidelity Digital Assets. "If more countries hold Bitcoin as part of their foreign exchange reserves, other countries may feel competitive pressure, increasing the pressure to do the same."

What does this mean for price? "From a simple supply and demand economics perspective, any additional demand for Bitcoin could push the price higher," Kuiper said. "Of course, the key is how large the incremental demand is and whether other investors are selling or holding."

Will Corporations Continue Buying Crypto?

Governments aren't the only potential source of new demand in 2026. Corporations may increasingly participate—some began adding Bitcoin and other cryptocurrencies to their balance sheets in 2025. To date, one of the most watched examples is software and analytics company Strategy (formerly MicroStrategy, ticker MSTR), which has been steadily buying Bitcoin since 2020. However, more companies adopted this practice this year, making it a trend. As of November, well over 100 publicly traded companies (both domestic and international) hold cryptocurrency. About 50 of these companies currently hold over 1 million Bitcoin.

"There are clearly arbitrage opportunities where some companies can leverage their market position or financing channels to raise funds for buying Bitcoin," Kuiper said. "Part of this stems from investment mandates and geographical and regulatory issues. For example, investors who cannot buy Bitcoin directly might choose to gain exposure through these companies or the securities they issue."

On the surface, corporate purchases of crypto add to market demand, which helps push asset prices higher. But investors should also be aware of the risks. "If these companies choose or are forced to sell some of their digital assets—for example, during a bear market—this could certainly create downward pressure on the price of Bitcoin or other digital assets these companies hold," Kuiper noted.

Source: Fidelity Investments. Past performance is no guarantee of future results.

Is the Four-Year Cycle Over?

Compared to traditional investments like stocks and bonds, Bitcoin's history is relatively short, but its price has roughly followed a four-year cycle (from bull market peak to peak, or bear market bottom to bottom). It formed bull market peaks in November 2013, December 2017, and November 2021, and bear market bottoms in January 2015, December 2018, and November 2022. These cycles were accompanied by significant price volatility: the first cycle dropped from $1,150 to $152, the second from $19,800 to $3,200, and the third from $69,000 to $15,500.

Bitcoin's movements often lead the entire crypto market to follow—in many cases, with even greater volatility.

Currently, we are around the four-year mark of the current cycle, as the last bull run peaked in November 2021. And over the past month, crypto prices have continued to fall. So, has this bull market already peaked?

If the four-year cycle repeats, we might be at or near the end of Bitcoin's current bull run. However, some crypto investors believe this historical trend is about to end, and the current price pullback is just a temporary retracement before the market resumes its upward trend.

What does this mean specifically? Some investors believe that while price pullbacks will still occur, the volatility of any decline will be far lower than in the past, and the magnitude may be so small that it doesn't feel like a full bear market. Others think we might be entering a supercycle where the bull market lasts for years. For reference, the commodity supercycle of the 2000s lasted nearly a decade.

Kuiper doesn't believe these cycles will disappear entirely, as the fear and greed that drive them haven't magically vanished. But he points out that if the four-year cycle were to repeat, we should have already set the all-time high for this cycle and entered a full bear market. While the pullback since November has been quite severe so far, he says we might not know for sure if a four-year cycle has truly formed until 2026. The current price drop could be the start of a new bear market, or it could just be a correction within a bull market that will later set new all-time highs—as we've already seen several times this cycle.

Whether these predictions come true remains to be seen, and we might not know until mid-2026.

Is It Too Late to Buy Bitcoin Now?

Despite the many uncertainties still present in the crypto market, one thing has become clearer: the crypto market is entering a new paradigm. "We're seeing a wholesale shift in the investor base and categories, and I think that will continue in 2026," Kuiper said. "Traditional fund managers and investors have started buying Bitcoin and other digital assets, but in terms of the amount of capital they could bring to this space, I think we've only scratched the surface."

With this in mind, investors not yet in the market might ask: Is it still a good time to buy Bitcoin?

For Kuiper, it depends on your investment horizon. If you're looking for gains in the short or medium term (four to five years or less), you might be late, especially if this cycle ultimately follows historical patterns.

"However, from a very long-term perspective, I personally believe that if you view Bitcoin as a store of value, you are never fundamentally 'too late,'" Kuiper said. "As long as its hard supply cap remains unchanged, I believe every purchase of Bitcoin is putting your labor or savings into something that won't be devalued by government monetary policy inflation."