Regulated Cryptocurrency Market: The 8 Major Institutions' Vision for the New Order in 2026

The cryptocurrency market is reaching a fundamental turning point in 2026. From its once “Wild West” chaotic era, it is gradually transforming into a regulated space akin to a “new branch of Wall Street.” Recent reports from eight mainstream institutions—including Fidelity, Bitwise, and Grayscale—reflect this historic shift in detail.

Until now, the market has primarily cycled around Bitcoin’s halving mechanism, but with the influx of institutional investors, a new paradigm is emerging. Sovereign nations like Brazil and Kyrgyzstan are advancing legislation on digital assets, and traditional asset management firms are entering the space one after another. The old “four-year cycle theory” is already reaching its limits.

The End of the Four-Year Cycle and the Shift to an Institutional Era

The long-held theory governing the crypto market is being challenged. The market cycle based on Bitcoin’s four-year halving—once considered an ironclad rule—is increasingly being “nullified” in the outlook for 2026.

Bitwise, Fidelity, and Grayscale agree: The influence of halving on the market is diminishing at a limit. 21Shares goes further, explicitly stating that “Bitcoin’s four-year cycle has burst.” Their data models suggest that the introduction of ETFs has fundamentally changed demand structures, shifting the market’s driving force from supply-side factors (miners’ halving) to demand-side factors (institutional continuous allocation).

As clients of BlackRock and Fidelity begin to consistently allocate BTC quarterly, the narrative of a four-year cycle tied to halving loses its appeal. Simultaneously, this structural shift signifies a maturation of asset attributes.

Bitwise makes a bold prediction: by 2026, Bitcoin’s volatility will fall below Nvidia’s for the first time. This is not just a numerical change; it indicates that Bitcoin is qualitatively evolving from a “high-beta tech stock” to a “mature risk hedge asset.”

Fidelity, without providing specific figures, emphasizes that amid the backdrop of global debt expansion and declining fiat currency values, Bitcoin will decouple from tech stocks and establish itself as an independent global inflation hedge.

Stablecoins, AI Payments, and Capital Flows within Regulatory Frameworks

After removing cyclical interference, the high-confidence capital flows that institutions are watching closely—though with some variation—are largely aligned in core logic.

If Bitcoin is digital gold, then stablecoins are digital dollars. Many institutions see stablecoins as evolving from assets confined within the crypto sphere to direct challengers to traditional financial pipelines.

According to 21Shares, the total market cap of stablecoins will surpass $1 trillion by 2026. More concretely, Galaxy Digital points out that on-chain stablecoin transaction volume will officially exceed the U.S. Automated Clearing House (ACH) network’s transaction volume. This means stablecoins are displacing traditional interbank settlement systems and becoming more efficient, high-speed payment highways.

Coinbase predicts stablecoin market cap will reach $1.2 trillion by 2028, and a16z emphasizes that stablecoins are evolving into the underlying payment layer of the internet.

However, a more notable development is in the AI payment space. Both a16z and Coinbase identify this as a major technological variable, each from different perspectives but with a shared vision.

Coinbase’s report focuses on Google’s Agentic Payments Protocol (AP2) standard. Their developed x402 protocol acts as an extension of this new standard, enabling AI agents to execute instant micro-payments directly via HTTP protocols. This opens the door to closed-loop business models among AI entities.

A more innovative concept is a16z’s “KYA” (Know Your Agent). They point out that within current on-chain transaction actors, non-human entities now account for 96%, indicating that traditional KYC (Know Your Customer) is evolving into KYA. AI agents, lacking bank accounts but holding crypto wallets, can continuously purchase data, computing power, and storage via micro-payments, 24/7 without fatigue.

Predictive markets are also a consensus area among institutions. Bitwise forecasts that the open interest in decentralized prediction markets will hit a record high, becoming a “truth source” alongside traditional media. 21Shares projects that the annual trading volume of prediction markets will surpass $100 billion.

Coinbase offers a unique perspective: as U.S. new tax laws restrict gambling loss deductions, users may inadvertently flow into prediction markets. The reason is that prediction markets could be classified as “derivatives” for tax purposes, not as gambling, thus allowing participants to benefit from tax advantages.

Diverging Institutional Consensus: DAT Liquidation, Quantum Threats, and L2淘汰

Consensus often gets priced into markets, and divergences create alpha opportunities and potential risks.

Views on the “Digital Asset Treasury” (DAT) model—where listed companies hold Bitcoin—are polarized among institutions.

The large liquidation camp, including Galaxy Digital and Grayscale, agree that the total size of DAT could reach $250 billion, but emphasize that only a few will survive. If smaller DAT firms trade below their net asset value (NAV) long-term, they will be forced to liquidate.

Galaxy Digital is more specific: “At least five DAT companies will sell assets, be acquired, or go bankrupt.” They believe that the indiscriminate imitation in 2025 will attract many companies lacking strategic capital, leading to a “liquidation phase” in 2026.

In contrast, Grayscale maintains a “redfin” view: while DATs have significant media presence, constraints such as accounting standards and the disappearance of premiums mean they will not be the primary drivers of market prices in 2026.

On quantum computing, opinions diverge as well. Coinbase’s report dedicates a chapter to the “quantum threat,” warning that the transition to post-quantum cryptography standards must begin immediately. They suggest upgrading signature algorithms to quantum-resistant solutions as an essential infrastructure security measure.

Grayscale remains calm: they see the “quantum threat” as a “redfin,” believing that within the 2026 investment cycle, the likelihood of quantum computers cracking elliptic curve cryptography is zero. Investors will not need to pay a “fear premium.”

The “big liquidation” of Layer 2 (L2) solutions is among the sharpest points from 21Shares. They believe most Ethereum L2s will fail to surpass 2026 and will fall into “zombie chains.”

Their reasoning is straightforward but powerful: liquidity and developer resources exhibit a strong Matthew effect, ultimately concentrating on top chains (Base, Arbitrum, Optimism, etc.) and high-performance chains (Solana, etc.). Galaxy Digital predicts that by 2026, the ratio of application-layer revenue to L1/L2 network revenue will double, confirming the “fat app” theory. Value is flowing from infrastructure layers to super apps with actual user bases.

Overlooked Opportunities: Privacy, Regulatory ICOs, and Crypto Stocks

Beyond mainstream views, some institutions propose their own “dark horse” forecasts.

Both Galaxy Digital and Grayscale are optimistic about privacy tokens, predicting that the total market cap of privacy-focused tokens will surpass $100 billion. They highlight Zcash (ZEC)’s resurgence, believing privacy will be re-evaluated from a “crime tool” to an “institutional necessity” (privacy-as-a-service).

21Shares expects that with the implementation of regulatory frameworks, “regulated ICOs” will return as legitimate capital-raising tools in the mainstream market. As clear legislation on digital assets in the U.S. is enacted, the once-banned ICO model could be revived under regulated conditions.

Bitwise forecasts that crypto-related stocks (mining firms, Coinbase, Galaxy Digital, etc.) will outperform the “Magnificent Seven” traditional tech giants.

Investment Strategies for 2026: Survival Rules in a Regulated Environment

Synthesizing the outlooks of these eight institutions, the market logic in 2026 has fundamentally changed. The simple “wait for halving and see” model is a thing of the past.

In this environment of increasing regulation, investors’ survival strategies will focus on three dimensions:

First, accept leading players and their actual revenue streams. Amid the tough culling of L2s and DATs, liquidity and capital structure will be key indicators of survival. Focus on protocols generating positive cash flow.

Second, understand the importance of upgrading technological infrastructure. From Google’s AP2 standard to KYA, new technologies will bring new alpha. Prioritize the implementation of protocols like x402.

Third, beware of false narratives. Institutions see not only golden opportunities but also “redfins.” Distinguishing long-term trends (such as stablecoins replacing ACH) from short-term speculation will be crucial for success in a regulated 2026.

(This article reflects analytical insights based on multiple institutional reports and does not constitute investment advice.)