By Thomas Perfumo, Kraken Global Economist
In 2025, crypto markets were predominantly driven by Bitcoin, itself shaped by macroeconomic forces and its adoption by the general public. This framework will continue until 2026. What has changed is not the importance of Bitcoin, but the channels through which demand, liquidity and risk are now expressed.
The new structure of the crypto market
As a macro asset, Bitcoin continues to lead shifts in market risk sentiment in a period defined by mixed economic growth, persistent inflation, and volatile geopolitical catalysts. This results in compressed volatility ranges, punctuated by sharp, narrative movements. The market seems less euphoric than previous cycles and structurally more complex.
An important driver of Bitcoin price discovery is now through institutional vehicles. US-listed Bitcoin ETFs (like BlackRock’s IBIT) and digital asset treasury companies (like Strategy) accounted for massive amounts of net capital flows in 2024 and through 2025.
In 2025 alone, the ETFs and strategy collectively represented nearly $44 billion in net spot demand for bitcoin. Still, price performance was disappointing compared to expectations, highlighting how supply dynamics have slowly changed.
The most likely source of marketable supply comes from long-term holders capitalizing on performance through 2025. Bitcoin Coin Days Destroyed – a measure of how long coins are held before being moved – reached its highest level ever for a single quarter in Q4 2025.
This suggests significant turnover from former HODLs at a time when crypto is competing for attention and capital against strong stock markets, AI-driven growth, and record price action for gold and other precious metals.
The result is a market that absorbs huge capital flows without the bullish reflexes seen in previous cycles.
Despite these headwinds, the overall market structure remains constructive. Systemic risk indicators are under control, stable coin liquidity is reaching unprecedented highs, and regulatory clarity is improving.
Innovation is accelerating, as is complexity, which tends to mask fragility – particularly in a macroeconomic regime where monetary policy support is no longer a given.
What to watch next
Looking ahead, several themes will shape the behavior of cryptocurrencies in 2026:
1. Macroeconomic trends and liquidity conditions
Economic growth is expected to remain modest, with the US outperforming regions like Europe and the UK, but inflation remains stable. Central banks are still expected to ease interest rate policy, with the exception of a few developed economies like Japan and Australia.
However, monetary easing is occurring at a slower pace than in 2025. Markets expect US policy rates to drift towards the low 3% range by the end of 2026, with the added benefit of a pause in quantitative tightening or a reduction in balance sheets.
Liquidity remains one of the most relevant leading indicators for risky assets, including cryptocurrencies. Although quantitative tightening has effectively ended in the United States, there is no clear path to quantitative easing absent a negative growth shock.
With Federal Reserve Chairman Jerome Powell’s term expiring in May 2026, markets may soon face a political transition that introduces uncertainty around liquidity management.
The risk here is asymmetric: easing is more likely to be a reaction to bad news rather than a proactive tailwind. The persistence of high inflation remains the main threat to a more constructive macroeconomic context.
Achieving a true Goldilocks outcome requires a combination of favorable developments in trade relations, reduced consumer price inflation, sustained confidence in increased investment in artificial intelligence, and a de-escalation of geopolitical conflicts.
2. Dynamics of IBIT and MSTR
ETF flows and strategy positioning continue to act as a major indicator of sentiment. However, the nature of this signal is changing. ETF inflows in 2025 were lower than in 2024, and digital asset treasuries like Strategy are not able to issue shares as accretively with compressed premiums to NAV.
Speculative positioning is also depressed. Options markets linked to vehicles like IBIT and Strategy saw a collapse in net delta exposure in late 2025, even below the levels seen during the April 2025 pricing crisis, which saw risky assets sold off aggressively.
Without a renewed sense of risk, it is difficult for these vehicles to catalyze another powerful rally in Bitcoin as they have in the past.
3. US market structure and regulatory dynamics
Regulatory clarity is no longer a theoretical tailwind: it is tangible. The passage of stablecoin legislation is already reshaping on-chain dollar liquidity, and attention is now turning to broader reform of market structure through the CLARITY Act.
If adopted, this framework would provide long-awaited clarity on the oversight of digital commodities and exchanges, likely accelerating capital formation and advancing the United States as the crypto capital of the world.
The global implications are also significant. Other countries are examining the results of U.S. policy decisions. The outcome will define where capital, developers and innovation migrate.
4. Changes in the volatility regime
Cryptocurrency volatility has been unusually low, even during periods of new all-time highs. This is a significant change from historical cyclical behavior. New all-time highs were seen while Bitcoin’s 30-day realized volatility hovered between 20 and 30%, levels typically associated with market cycle troughs and not peaks.
Bitcoin’s market capitalization dominance reinforces this signal. Throughout 2025, dominance was on average above 60%, without a lasting fall towards the levels below 50% which historically marked end-of-cycle speculative excesses.
Whether this reflects a structurally more mature market – or simply delayed volatility – remains one of the most important open questions heading into 2026.
5. Tokenization of traditional assets
The tokenization of real-world assets is becoming one of the most important structural stories in crypto. Tokenized financial assets grew from approximately $5.6 billion to nearly $19 billion in a single year, expanding well beyond Treasury funds into commodities, private credit, and public equities.
As the regulatory posture has shifted from adversarial to collaborative, incumbents are increasingly exploring on-chain distribution and settlement. Tokenization of widely held assets such as large-cap U.S. stocks could unlock new sources of global demand and on-chain liquidity, serving as a catalyst for the next phase of growth, just as ICOs or AMMs did in previous eras.
6. Tokenomic news for DeFi
The evolution of tokenomics could prove a niche but powerful catalyst. Many DeFi governance tokens launched in previous cycles have been structured more conservatively to avoid value accumulation mechanisms such as fee sharing. This era may be coming to an end.
Proposals such as Uniswap’s decision to enable protocol fees signal a broader shift towards models that support sustainable cash flows and long-term alignment. If successful, these changes could revalue a subset of DeFi assets, moving from pure momentum to more sustainable valuation frameworks with improved incentive structures for future growth.
Setting the stage for 2026
As crypto heads towards 2026, the market balances macroeconomic uncertainty with accelerating on-chain innovation.
Bitcoin remains the primary tool through which risk sentiment is expressed, but it no longer functions in isolation. Liquidity conditions, institutional positioning, regulatory clarity and the maturation of asset tokenization and tokenomics are increasingly intertwined.
Sentiment is weaker than a year ago, and that’s important. Expectations are reset, debt is reduced, and structural progress continues largely in the shadows.
Although tail risks remain elevated, particularly on the macroeconomic side, the underlying foundations appear more resilient than in previous cycles.
The industry is no longer in its infancy, but it continues to evolve. The foundations laid today could define the contours of crypto’s next expansion, even if the path remains uneven.
The views and opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of Kraken or its management.
