2026 Outlook (Part 1): The Crypto Industry from an Institutional Perspective – From Cycle Narratives to Structural Reshaping

The cryptocurrency industry in 2026 stands at a clear watershed: marked by the institutionalized entry of institutional capital and the end of the traditional four-year halving cycle, the underlying logic of industry development is undergoing a fundamental shift. This chapter, based on an integrated analysis of the 2026 annual outlook reports released by over a dozen mainstream institutions including Messari, Grayscale, a16z, BlackRock, Bitwise, Fidelity, Coinbase, Galaxy, VanEck, and 21Shares, finds that at the macro level, institutionalization, regulatory clarity, the integration of AI and Crypto technologies, the shift of value to the application layer, and stablecoins and RWA becoming core bridges constitute five irreversible consensuses, collectively driving the industry from "speculation and narrative-driven" to a structural maturity defined by "cash flow, utility, and compliance."

However, there are significant divergences regarding the specific paths of technological roadmaps, valuation trajectories, and commercialization pace. This "unity within divergence" points to a core conclusion: the crypto industry is accelerating its integration from a discrete market driven by speculation and narratives into a global financial infrastructure defined by cash flow, utility, and compliance. Regulatory clarity will become the unifying cornerstone, catalyzing the injection of trillions in traditional capital through compliant channels such as stablecoins, RWA, and ETFs, while simultaneously driving brutal yet necessary consolidation and cleansing within sub-sectors like public chains, DATs, and privacy. Investors will no longer face simple bull/bear cycle judgments but will need to precisely capture niche Alpha opportunities driven by AI technology integration, capital efficiency, and regulatory arbitrage, all within the consensus of structural growth.

1. Consensus and Divergence: The 2026 Landscape from an Institutional Perspective

Synthesizing the 2026 outlook reports from multiple institutions including Messari, Grayscale, a16z, BlackRock, Bitwise, Fidelity, Coinbase, Galaxy, VanEck, and 21Shares, the industry has formed a strong consensus on macro trends but harbors deep divergences in micro implementation paths and market performance. This contradictory unity precisely characterizes the typical features of an industry in transition.

1.1 The Unifying Foundation: Five Core Consensuses

1. The End of the Four-Year Cycle and the Dawn of the Institutional Era

Institutions represented by Bitwise, Fidelity, and Grayscale unanimously agree that the "four-year Bitcoin halving cycle" narrative is now obsolete. Grayscale explicitly stated in its report "2026 Digital Asset Outlook: Dawn of the Institutional Era": "Valuation appreciation in 2026 will mark the end of the four-year cycle theory," and expects Bitcoin to set a new all-time high in the first half of 2026.

Fidelity Digital Assets noted in its 2026 outlook that Bitcoin's one-year realized volatility has dropped to a historical low of 42%, a phenomenon that has historically often preceded new highs. Bitwise predicts that ETFs will purchase over 100% of the new supply of Bitcoin, Ethereum, and Solana, signaling a complete shift in driving force from the supply side (mining output halving) to the demand side (sustained allocation by ETFs and other institutions). This shift means the crypto market is moving from cyclical volatility driven by retail sentiment to a "structural slow bull" dominated by the long-term asset allocation logic of pensions, endowments, and sovereign wealth funds.

2. Stablecoins: From Crypto Tools to Global Payment Infrastructure

All institutions place stablecoins at the core of 2026 growth. According to on-chain data, total stablecoin transaction volume reached $33 trillion in 2025, with USDC at approximately $18.3 trillion and USDT at approximately $13.3 trillion, while Visa's total transaction volume during the same period was $16.7 trillion. This means stablecoin transaction volume is already nearly double that of Visa and will further solidify this position in 2026, directly challenging traditional finance's ACH system to become the internet's "fundamental settlement layer."

a16z emphasized in its outlook released at the end of 2025: "Stablecoins will completely transform from niche financial instruments into the fundamental settlement layer of the internet." Under the regulatory framework of the GENIUS Act, signed into law on July 18, 2025, which requires stablecoin issuers to hold 100% reserves in dollars or short-term Treasuries with monthly public disclosures, the legal foundation is laid for the large-scale adoption of compliant stablecoins in B2B payments and cross-border settlements.

Coinbase predicts the stablecoin market cap will reach $1.2 trillion by the end of 2028, while both 21Shares and Galaxy expect it to surpass the $1 trillion mark in 2026. Galaxy more explicitly states that stablecoin transaction volume will surpass the US ACH system, becoming true global payment infrastructure.

3. Regulatory Clarity as the Core Catalyst

The passage of the US GENIUS Act is just the beginning. The Act was signed into public law by President Trump on July 18, 2025, passing the Senate 68-30 and the House 308-122, establishing a federal regulatory framework for "payment stablecoins."

The more comprehensive market structure legislation, the CLARITY Act, passed the House on July 17, 2025, with a 294-134 vote and was submitted to the Senate Banking Committee on September 18, 2025, with a full Senate vote expected on January 15, 2026. This bill divides digital asset regulatory authority between the CFTC and SEC and provides a safe harbor for DeFi participants.

The market widely expects the CLARITY Act to make key progress in 2026. Grayscale predicts bipartisan market structure legislation will become US law in 2026, seen as the most critical prerequisite for unlocking institutional capital, clarifying asset classification, and reducing legal uncertainty, far outweighing short-term price volatility. Bitwise explicitly stated that the passage of the CLARITY Act will trigger new all-time highs for Ethereum and Solana.

4. Deep Integration of AI and Crypto

a16z, Coinbase, Messari, and others all highlight the prospects of AI Agent integration with the crypto economy. The consensus is that AI agents require permissionless payment and settlement networks, which will catalyze a shift from KYC (Know Your Customer) to KYA (Know Your Agent).

Coinbase noted in its 2026 outlook: "AI × crypto: autonomous agent systems … protocols like x402 enable settlement for high-frequency, low-value transactions," emphasizing that the x402 protocol will support a micro-payment M2M economy. Grayscale lists "AI centralization needs blockchain solutions" as one of its 2026 core themes, believing blockchain can provide verifiable computation and data for AI. BlackRock expects AI construction to boost Bitcoin miners and views AI and crypto as superpowers driving capital-intensive transformation.

5. Value Capture Shift from "Fat Protocols" to "Fat Applications"

The early theory that "the protocol layer captures most of the value" is widely considered outdated. Galaxy, in its 26 predictions, explicitly endorses the "Fat App Thesis", stating that "economic value capture is shifting from protocols to applications," with L1 public chains embedding revenue-generating applications.

a16z emphasizes that application layers like perpetual contracts, wallets, and DEXs will capture revenue, surpassing the protocol layer. Coinbase proposes "Tokenomics 2.0," i.e., revenue-linked token models, and the proliferation of application-specific chains into a "network of networks." The current consensus is that value will aggregate upward to application layers that directly generate cash flow, possess user entry points, and have brand effects (e.g., super apps, wallets, prediction market platforms), while underlying public chains gradually evolve into utility-like settlement layers.

1.2 Focal Points of Divergence: Sources of Alpha and Risk

Beneath the unified consensus, institutions have significant divergences in specific judgments. These points of divergence are precisely the potential sources of Alpha opportunities or major risks. The following outlines opposing views among major institutions on five key issues:

1. Divergence on Bitcoin Price Trajectory

One side, represented by Bitwise and Grayscale, believes Bitcoin will break the traditional cycle and set a new all-time high in the first half of 2026. Bitwise predicts ETFs will purchase over 100% of the new supply, constituting strong demand support.

The other side, represented by Galaxy and VanEck, believes 2026 will be a year of chaotic volatility. Galaxy, through options market pricing, finds the market expects Bitcoin to fluctuate within a wide range of $50,000 to $250,000, reflecting immense uncertainty. VanEck emphasizes macroeconomic factors will dominate price movements.

Core divergence: Can sustained institutional inflows fully hedge against macroeconomic uncertainty and profit-taking pressure from existing holders?

2. Divergence on the Future of Digital Asset Treasuries (DATs)

Coinbase is optimistic, believing DATs will evolve into DATs 2.0, actively capturing yield through staking, restaking, and block space trading, becoming professional on-chain asset management tools.

Galaxy holds an extremely cautious stance, explicitly predicting at least 5 DATs companies will go bankrupt or be acquired in 2026. Grayscale even dismisses DATs as a "red herring" (a distracting irrelevance), deeming them unworthy of attention.

Core divergence: Is the DATs business model a sustainable capital allocation tool, or merely a product of financial leverage during a bull run?

3. Divergence on the Quantum Computing Threat

Coinbase and Fireblocks believe quantum computing is a pressing long-term threat requiring immediate migration to post-quantum cryptography. Pantera Capital even predicts a potential "quantum panic" in 2026, where news of a technological breakthrough could trigger market volatility even before an actual threat materializes.

Grayscale lists the quantum threat as a "red herring," believing it has no substantive impact on the 2026 market. Research from a16z and Fireblocks also indicates that cryptographically relevant quantum computers (CRQC) capable of posing a real threat are unlikely to appear before 2030.

Core divergence: Different judgments on the threat timeline and whether the market should price in "quantum risk" in advance.

4. Divergence on Ethereum's Positioning and Value

The optimistic view holds that Ethereum remains the institutional-grade settlement layer and core arena for RWA. Fidelity anticipates the Fusaka upgrade will optimize L1 value capture, while BlackRock more explicitly states Ethereum will become the sole settlement layer standard for stablecoins and digital liquidity.

Messari offers sharp criticism, arguing Ethereum faces a severe identity crisis. Its value is being squeezed from both ends: the store-of-value function is occupied by Bitcoin, and application scenarios are absorbed by L2s. Particularly after the EIP-4844 upgrade, L2 fees no longer fully flow back to the mainnet, causing Ethereum to enter an inflationary state, potentially relegating it to a "settlement garbage dump."

Core divergence: After the mass migration of mainnet activity to L2s, can Ethereum establish a new, sustainable economic and security model?

5. Divergence on the Layer 2 Competitive Landscape

The optimistic camp believes the L2 ecosystem will flourish, with different L2s specializing in different verticals—for example, Base focusing on consumer applications, Arbitrum深耕 DeFi—forming a multi-chain coexistence with specialized division of labor. 21Shares describes this trend as vertical differentiation.

The pessimistic camp predicts brutal consolidation. 21Shares explicitly predicted in December 2025 that "most Ethereum L2s face collapse risk in 2026." Data from Galaxy and The Block shows liquidity and developers are concentrating towards a very few leaders, with the top three L2s already accounting for 90% of transaction volume, with Base alone exceeding 60%. Numerous small and medium-sized L2s will become zombie chains.

Core divergence: Will the L2赛道 move towards vertical differentiation with multi-chain coexistence, or towards winner-takes-all brutal consolidation? These divergences will be validated by the market in 2026.

2. The Interaction of Divergence and Unity: Industry Reshaping Under Dynamic Evolution

Divergence and unity are not static opposites but interact dynamically across three levels, collectively driving the industry towards a more mature form.

2.1 Macro Consensus Drives Capital, Sector Divergence Determines Allocation

Unified macro narratives lay the track for the traditional world to enter the crypto space, creating unprecedented expectations for capital inflows. However, the specific flow of this massive capital is determined by the internal divergences and competitive outcomes within each sector.

For example, the consensus that stablecoins will become payment infrastructure will attract significant capital, but how that capital is allocated between compliant yield-bearing stablecoins (e.g., USDC's market cap grew 75% to $77B in 2025) and traditional giants (e.g., bank-issued stablecoins) remains a point of divergence. Bitwise predicts stablecoins will be blamed as scapegoats for emerging market currency crises, hinting at geopolitical risk.

Similarly, the RWA consensus attracts institutional capital—on-chain data shows total RWA TVL reached approximately $20B in 2025 (excluding stablecoins), with tokenized US Treasuries accounting for $8.99B (45%) and private credit $2-6B—but whether capital prioritizes tokenized Treasuries (e.g., BlackRock's BUIDL fund AUM reached $1.73B, capturing 41.1% market share of tokenized Treasuries) or riskier assets like private credit, real estate, or clean energy remains unknown.

2.2 Technological Evolution Bridges Divergence, Fostering New Unified Standards

Some current technological divergences may resolve into new unities through market selection and evolution. For instance, in the AI×Crypto space, debates over the timeline for agent economy adoption may quickly dissipate if protocols like x402 are adopted as mainstream standards by entities like Google, making M2M payments a new unified infrastructure.

In the privacy sector, the debate between privacy coins and privacy features may also converge into a unified standard driven by institutional demand for auditable privacy (e.g., Zcash's Viewing Keys). 21Shares predicts 2026 will be a breakthrough year for privacy, becoming a key unlock for enterprise Ethereum applications, making privacy a default component of financial applications rather than a standalone asset.

2.3 Regional Strategic Differentiation Within a Unified Regulatory Framework

The global regulatory trend is towards clarity, but specific paths will show significant regional divergence. The US is establishing a federal framework via the GENIUS and CLARITY Acts; China maintains a dual regulatory framework of strengthening virtual currency oversight while steadily developing the digital yuan; the EU has gained first-mover advantage with MiCA; and other regions are also adopting differentiated strategies.

This divergence in regulatory environments will lead to divergence in market structure, product innovation, and capital hubs. For example, RWA and stablecoin issuance may cluster in different jurisdictions based on regulatory friendliness—the US GENIUS Act requires issuers to be under OCC supervision or state-level regimes, while EU MiCA has a different framework.

3. Core 2026 Outlook and Independent Research Judgments

Based on the interactive analysis of institutional annual outlooks above, combined with on-chain data and market structure changes, I present the following core outlook and judgments independent of institutional reports for 2026:

3.1 Technology Evolution Outlook

• Invisibilization of Settlement Layer and Application Layer Dominance

Blockchain technology itself will become further invisible, with user experience becoming the competitive focus. Account Abstraction (AA), Intent-Centric Architecture, and Chain Abstraction will become standard, greatly reducing user friction with complex underlying layers. 21Shares predicts L2s will evolve towards "leaner, more resilient" forms in 2026, with smaller rollups becoming zombie chains, as seen in 2025 cases like Kinto shutting down, Loopring wallet halting operations, and Blast TVL dropping 97%.

• AI and Crypto Fusion Point Moves Forward

I believe the core impact of AI on crypto in 2026 will not be the full-scale mass adoption of a completely autonomous Agent economy, but rather scenario-specific implementation: AI-enhanced on-chain interaction interfaces (e.g., executing DeFi transactions via natural language) and AI-optimized infrastructure (e.g., dynamic gas pricing, security vulnerability monitoring). The x402 protocol will become the core foundation for AI agent M2M payments, landing first in lightweight scenarios. Underlying decentralized compute and data networks (DePIN) will see substantive growth driven by AI demand.

3.2 Capital Flow Outlook

• Capital Shifts from Narrative Speculation to Cash Flow Validation

"Fat applications" with clear fee capture mechanisms, positive cash flow, and real user growth will receive valuation premiums. On-chain data shows that in 2025, only Base L2 was profitable at $55 million, while most L2s were loss-making, validating the importance of cash flow. Venture capital will concentrate more heavily on a few leading projects with potential monopolistic capabilities—the top three L2s (Base, Arbitrum, Optimism) already account for 90% of transaction volume, with Base alone exceeding 60%.

• TriFi (Triangular Finance, DeFi+CeFi+TradFi) Becomes the Mainstream Paradigm

The boundaries between pure DeFi and pure TradFi will blur. Traditional financial institutions will utilize public chains as efficient settlement and composability layers while retaining their regulatory, custodial, and fiat on/off-ramp advantages. BlackRock