In the final months of 2025, a bear market atmosphere began to spread.
Bitcoin has fallen from its high of $120,000, ETF inflows have dried up, and various cryptocurrencies have shown divergent trends. Meme coin, which once ignited market sentiment, has also become largely ignored. Compared to the end of 2021, there was no sudden regulatory crackdown this time, and apart from the massive crash on October 11th, there doesn't seem to be a serious liquidity crisis. Yet, something still feels off.
If the crypto world in 2025 was a recalibration of true and false values, will crypto be better in 2026?
This article attempts to find the answer, and perhaps we need to accept the fact that the crypto industry may be entering an era that is no longer driven by unilateral growth or the "casino narrative".
I. With the macroeconomic environment improving, Bitcoin remains in the spotlight.
Over the past year, Bitcoin's price performance and market positioning have undergone significant changes.
After reaching an all-time high of $120,000, the price began to decline, with increased volatility and a gradual cooling of market sentiment. Unlike past rallies driven by retail investors, this round of gains was primarily driven by institutional funds behind ETFs. Looking at holding costs, CryptoQuant analyst Axel Adler Jr. pointed out last month that the average holding cost of US ETFs was $79,000, which many consider one of the price support levels. Therefore, Bitcoin's current price action increasingly resembles that of a highly volatile institutional asset. On the one hand, it possesses an inflation-hedging role similar to gold; on the other hand, like tech stocks, it is influenced by macroeconomic sentiment and risk appetite, exhibiting beta characteristics.
From a broader perspective, 2025 is expected to be a year of improved sentiment for global risk assets. AI is the main theme, with US stocks continuously hitting new highs and the Federal Reserve announcing three interest rate cuts in December, leading the market back into a phase of improved liquidity expectations. The FOMC's year-end economic projections also indicate that the US GDP growth forecast for 2026 has been revised upward from 1.8% to 2.2%–2.5%. The general expectation is that easing measures will continue next year, which may be beneficial for assets like Bitcoin.
However, the market is not without risks. If the economy suddenly weakens in 2026, or inflation unexpectedly rebounds, risky assets could still face significant corrections.
II. Regulatory Shift: Policy Trends in the United States and Hong Kong
Another important change in 2025 is the formalization of the regulatory framework.
In the United States, two key bills have been passed. The first is the GENIUS Stablecoin Act, which clarifies the definition of stablecoins, reserve requirements, and issuance qualification thresholds, providing a compliance path for mainstream stablecoin issuers. This act was signed into law by the President in July 2025 and will take effect 18 months after signing or 120 days after the regulatory agency issues its final rules. The second is the CLARITY Act, which systematically delineates the boundaries between "security tokens" (regulated by the SEC) and "commodity tokens" (regulated by the CFTC) and proposes tiered regulation. This bill will be submitted to the Senate for consideration in January, and may then require the President's signature; its effective date is yet to be determined. Simultaneously, the SEC is also accelerating the approval of more crypto ETFs, opening up channels for institutional products.
In Hong Kong, regulatory efforts are also accelerating. In 2025, the Hong Kong Monetary Authority (HKMA) introduced a stablecoin issuer regulatory regime, explicitly requiring all Hong Kong-based stablecoin issuers to be licensed. This means that in the future, issuing USD or RMB stablecoins in Hong Kong will require meeting certain capital and compliance requirements. Furthermore, HashKey has already listed on the Hong Kong Stock Exchange, becoming the first compliant platform with crypto trading as its core business to IPO in Hong Kong, marking a significant milestone.
Overall, the regulatory trends in the United States and Hong Kong are both aimed at curbing illegal speculation while opening up legitimate business channels, thus promoting the industry's evolution towards institutionalization and compliance.
III. Three main themes: stablecoins, prediction markets, and on-chain US stocks
Over the past few years, the most stable growth curve in the crypto industry has actually been stablecoins.
By 2025, the global issuance of stablecoins had exceeded $300 billion, with USDT and USDC accounting for more than 80% of the total. Stablecoins are becoming part of the global payment network, and the use cases of both USDT and USDC have penetrated into daily merchants and cross-border settlements.
In 2026, stablecoins are likely to be closer to the real world than ever before, with traditional giants like Visa, Stripe, and PayPal already using them for settlements. For example, Stripe already supports merchants subscribing with stablecoins, and there are already real-world services using them.
Image source: a16z
Furthermore, with clearer regulations, government bond-backed stablecoins (backed by high-quality assets) and regional stablecoins are expected to emerge, such as the digital currency bridge projects promoted by Japan and the European Union.
Another area worth noting is market prediction.
Originally, most people thought that prediction markets were too niche or non-compliant. But now, they are slowly transforming into a combination of "on-chain betting + pricing tools" for topics such as the US election, sports games, and economic data.
For example, Kalshi obtained a formal futures license from the US CFTC, allowing it to legally offer prediction trading related to macroeconomic data, and its current valuation has climbed to $11 billion. Meanwhile, Polymarket, leveraging topics such as the US presidential election and entertainment events, has become a platform for a large number of users to place bets and monitor public opinion.
By 2026, prediction markets may move beyond pure speculation. Users may not just bet on wins and losses, but rather vote with their money, expressing their judgment on the probability of a particular outcome. This collective wisdom-based pricing method could be referenced and used by media, research institutions, and even trading strategies. Furthermore, AI will unlock new possibilities for prediction markets, allowing them to move beyond human betting and automatically analyze data, place orders, and even generate new betting lines. This will make prediction markets faster and smarter, gradually transforming them into tools for assessing risk and trends, rather than just places for betting.
Finally, and this cannot be ignored, is the development of on-chain US stocks.
In short, the crypto industry is now not only trading crypto assets, but also bringing real-world assets onto the blockchain. For example, Securitize plans to launch the first fully compliant on-chain stock trading platform in 2026, where tokens purchased by users on the blockchain are backed by real company stock and entitle them to voting rights and dividends.
IV. The Emergence of Marginal Narratives: A New Direction That May Take Off in 2026
https://a16zcrypto.com/posts/article/big-ideas-things-excited-about-crypto-2026/
Image source: a16z
1. The identity issue of AI agents
As AI agents begin to participate in transactions, browsing, placing orders, and even interacting with smart contracts, a key question arises: how do these non-human identities prove "who they are"?
a16z's "Know Your Agent" (KYA) concept aims to address this issue. On-chain, any agent initiating a transaction must have clear permissions and ownership, requiring cryptographically signed credentials for the transaction. In 2026, this could become a prerequisite for the large-scale deployment of on-chain AI.
2. x402 protocol and micropayments
a16z predicts that as AI Agents extensively trade data, utilize computing power, and access interfaces, we will enter an era of "automatic settlement + programmatic payment."
Manual payments will no longer be necessary; AI Agents can identify needs and automatically process payments—this is precisely the real-world problem that protocols like x402 are solving. Their presence will become increasingly significant by 2026.
3. Privacy chains will receive more attention.
a16z points out a key trend: compared to the convergence of performance competition, privacy will become the core competitive advantage of future public blockchains. In the past, people worried that privacy-focused blockchains would hinder regulation and lack transparency. But now the problem is reversed; business data is too sensitive, and without privacy protection, compliant institutions simply dare not use it. This is precisely why blockchains with built-in privacy protection are becoming increasingly attractive. Once users use these blockchains, their data is less likely to be leaked, and the cost of migration is higher, naturally creating new user stickiness—this is essentially a network effect.
4. Staked Media
In an era where AI generates massive amounts of content, judging the reliability of a statement requires more than just looking at who said it; it also requires considering the costs incurred by the speaker. Therefore, a16z proposes a new media model where content creators not only speak out but also "stake" their positions through methods such as asset lock-up, prediction markets, and NFT tokens.
For example, if you express a bullish view on ETH, you simultaneously lock up your own ETH holdings as collateral; if you make an election prediction, you also place your own bet on the blockchain. This open alignment of interests will make content more than just empty talk. If this approach proves successful, it could become the new norm for on-chain media in the future.
Of course, the a16z report outlines far more than just these directions. This article focuses on four trends that we believe are particularly representative, while other directions are equally noteworthy, such as: stablecoin deposit and withdrawal upgrades, RWA crypto-native adoption, stablecoin-driven upgrades to bank ledger systems, diversified wealth management, the rise of AI research assistants, AI agent real-time content revenue sharing mechanisms, decentralized quantum-resistant communication, "privacy as a service" becoming infrastructure, the DeFi security paradigm shift, intelligent prediction markets, verifiable cloud computing, emphasis on product-market fit (PMF), and crypto legislation unlocking more potential from blockchain.
Interested readers can refer to the original a16z report for further in-depth understanding.
V. The crypto industry is moving beyond its domestic circulation.
The early growth of the crypto industry was largely built on a self-congratulatory system, with token issuance, rebates, and airdrops all attempting to attract more people to stay. However, this closed loop is gradually being broken by reality.
From Polymarket to USDT, and then to the cross-border applications of USDC, we are seeing more and more people who are not Web3 users using blockchain tools. Small vendors on the streets of Lagos may not understand wallet structures, but they know that using USDT is much faster than bank transfers. In countries with high inflation, depositors are flocking to USDC, simply for hedging rather than speculation. One of the most obvious changes is appearing in payment scenarios in developing countries, such as the Philippine exchange Coins.ph partnering with Circle to open a low-cost USDC remittance channel.
This trend indicates that encryption technology is being embedded in real-world scenarios such as cross-border payments and remittance channels. The true future of encryption may lie in how to use technology to solve real-world problems, enabling more ordinary people to unconsciously adopt blockchain technology.
VI. The Crypto Industry from a KOL's Perspective
The most recent discussion about whether spending years in the crypto industry is worthwhile was essentially a collective review of the industry.
Nic Carter, a partner at Castle Island Ventures (@nic_carter), continued his reflection on whether eight years of crypto had been wasted, frankly stating that only Bitcoin, stablecoins, DEXs, and prediction markets have truly achieved significant product-market fit (PMF) to date. He chooses to maintain pragmatic idealism, accepting that bubbles and frenzy are part of the path, not the whole.
Dragonfly partner Haseeb (@hosseeb) put it more bluntly, pointing out that the problem isn't the existence of casinos, but rather that focusing solely on their glamour will cause us to miss out on the real transformation of the industry. He believes that cryptocurrency is a better vehicle for finance and will forever change the nature of money, hoping the industry will remain patient: "The Industrial Revolution took 50 years to change productivity, and we've only had 15 years."
XHunt & Biteye founder @DeFiTeddy2020's summary is also extremely realistic. In his view, the crypto industry can quickly expose the true nature of finance, and will face projects going to zero, prices decoupling from fundamentals, and even insider trading, manipulation, and exploitation. It is not a breeding ground for idealism, but a market that constantly educates participants with real money, and is very demanding on one's mind.
Regarding the future development direction of the industry, KOL @xincctnnq in the crypto offers a long-term perspective: crypto is truly attempting to solve long-standing problems such as the monetary system, contract execution, digital property rights, capital market efficiency, and financial inclusion. Even if the results are distant and the process is rough, it is worth continuing to try.
Furthermore, trader and analyst @CryptoPainter offered a more market-structure-oriented explanation: the crypto market repeats its consistent operating mechanism—"value investing"—"conviction investing"—"emotional speculation"—"utter disappointment," and then it starts again. This cycle occurred in 2018 and 2022, and it's destined to happen again. Gamblers and casinos are not abnormal, but rather part of the market's self-regulation process, a way to deplete bubbles.
DougieDeLuca, a member of Figment Capital, offered a perspective that resembled a summary of a phase in the industry. He stated that "Crypto is dead" does not mean that the price has gone to zero or the blockchain has stopped operating, but rather that "Crypto as a closed industry is dying out." True success should be about integrating Crypto technology into the daily lives of ordinary people.
From a more institutional perspective, KOL and researcher Lanhu (@lanhubiji) noted that as older users begin to leave, newcomers with traditional financial backgrounds are entering the market. In their view, crypto is a long-term trend that has already entered a path of standardization, interoperability, and scalability. Three years from now, a completely new era of on-chain finance, an on-chain Wall Street, will gradually emerge.
Jackyi Yi, founder of LD Capital, offers a more cyclical perspective, pointing out that the recent slump in crypto is largely due to a temporary convergence of liquidity and macroeconomic events. He believes the negative factors are gradually being digested, and with the dual benefits of interest rate cut expectations and crypto policies, he remains optimistic about the future market.
At a broader level of regulation and industry structure, Xiao Feng, Chairman of Hashkey Group, offered a particularly systematic assessment, outlining three major future trends:
First, the global trend in crypto regulation is shifting from "voluntary acceptance" to "mandatory regulation," with governments gradually eliminating offshore gray areas and crypto trading moving towards licensing. For example, in Hong Kong, all unlicensed trading platforms were required to exit the market starting in June 2023.
Second, crypto is no longer just about native assets like BTC and ETH; more traditional financial assets are being migrated onto the blockchain through tokenization, forming a new type of regulated and compliant securitization market.
Third, moving from "off-chain" to "on-chain", he predicts that the second half of 2026 may be the key moment for the prototype of "on-chain Wall Street" to take shape.
VII. Conclusion
Will encryption be better in 2026?
If you're expecting a "skyrocketing price," the answer might be uncertain.
But if the question is whether the industry is moving towards a more authentic and useful direction, the answer is probably yes.
From crypto ETFs to stablecoin payments, from on-chain government bonds to prediction markets, from on-chain agents to decentralized AI, all of these point to one thing:
The crypto industry may begin to take root in the real world, and may increasingly resemble a twin financial system running parallel to the real-world financial system, resonating with the stock market, macro liquidity, policy expectations, and even the AI cycle.
