Bitcoin could be headed for a prolonged downturn, according to Cantor Fitzgerald, but this will likely be a prelude to the crypto industry entering a more stable and institutional phase.
Markets are likely in the first phase of a crypto winter, echoing Bitcoin’s historic four-year cycle, according to a year-end report from analyst Brett Knoblauch. Bitcoin is about 85 days past its peak, and Knoblauch suggests prices could remain under pressure for months, possibly even testing Strategy’s (MSTR) average breakeven price near $75,000.
However, unlike past recessions, this one cannot be defined by massive selloffs or structural failures. Institutional players, not retail traders, now shape the contours of the market, according to Knoblauch, who identified a growing gap between token price performance and what’s actually happening under the hood, particularly in decentralized finance (DeFi), tokenized assets and crypto infrastructure.
Take tokenization of real-world assets (RWA). According to the report, the value of tokenized on-chain RWAs – assets such as credit products, US Treasuries and stocks – tripled over the year to $18.5 billion. Cantor said the amount could exceed $50 billion in 2026, with the pace accelerating as more financial institutions experiment with on-chain settlement.
This change is also reflected in the way cryptocurrencies are traded. Decentralized exchanges (DEXs), which operate without intermediaries, are gaining market share compared to centralized platforms. Even though trading volumes could fall in 2026 alongside the price of bitcoin, Cantor said he expects DEXs, particularly those trading perpetual futures, to continue to grow as infrastructure and user experience improve.
Regulatory clarity is a key element in this evolving landscape. The recent passage of the Digital Asset Market Clarity Act, or CLARITY, in the United States marks a turning point, the report said. The law defines when a digital asset is treated as a security versus a commodity and assigns primary oversight of crypto spot markets to the Commodity Futures Trading Commission (CFTC) once decentralization thresholds are met.
This legal framework could reduce overall risk and open the door for banks and asset managers to engage more directly in crypto markets. It also strengthens the legitimacy of decentralized protocols by providing compliance pathways, which have historically been a major obstacle.
Other trends highlighted by Cantor include the rise of on-chain prediction markets, particularly in sports betting, where volumes soared to more than $5.9 billion, or more than 50% of DraftKings’ management in the third quarter. Companies like Robinhood (HOOD), Coinbase (COIN), and Gemini (GEMI) have entered the industry, introducing fairer, orderbook-based alternatives to traditional sports betting.
Yet risks remain. The price of Bitcoin is only about 17% above the average cost basis of the Bitcoin cash company’s strategy. A break below this level could spook the market, although Cantor believes the company is unlikely to sell. Meanwhile, digital asset trusts (DATs) have slowed their accumulation as token prices and trust premiums compress.
The coming year may not deliver the next big crypto breakthrough. But the foundations for more sustainable infrastructure and deeper institutional adoption appear to be solidifying even as prices fall.
