Dispatch #277: The year ahead

• Crypto’s challenge in 2026
• Bitcoin’s new cyclicity
• Ethereum’s year of scaling

The big idea

Crypto in 2026: From narratives to infrastructure

Crypto enters 2026 with less to prove – and more to sustain. After years defined by cycles and narratives, the next phase looks quieter on the surface but heavier underneath. The industry isn’t short on innovation; the real test is whether it can scale as financial infrastructure under clearer rules, tighter risk management, and higher expectations.

Access becomes allocation-ready: Crypto exposure is increasingly delivered through familiar formats: exchange-traded products, brokerage rails, and balance-sheet vehicles. Global crypto ETP assets already sit in the hundreds of billions and, if current adoption trends persist, could push toward the $400 billion range by the end of 2026. As access normalizes, participation increasingly shifts from momentum chasing to portfolio allocation – with longer holding periods and more stable supply dynamics.

Market structure starts to outweigh narratives: Bitcoin’s issuance rate has now fallen below 1% annually, lower than gold’s inflation rate, but each halving delivers a smaller marginal shock. Instead, derivatives play a growing role in price discovery. Perpetual futures and options now account for the majority of trading activity, meaning funding rates, positioning, and leverage constraints increasingly shape short-term moves. In 2026, liquidity conditions may matter as much as storylines.

Stablecoins scale into payment and settlement rails: Stablecoin supply has grown more than tenfold in five years, recently surpassing $300 billion. Under supportive regulatory and macro conditions, circulation could approach – and potentially exceed, $1 trillion by the end of 2026. Growth is driven less by trading and more by settlement, treasury flows, and payments, enabling faster, cheaper, and always-on dollar rails that increasingly operate behind the scenes.

Tokenization moves from pilots to distribution: Tokenized real-world assets stood near $35 billion in on-chain value in 2025, led by cash-like instruments and short-duration government debt. By 2026, some scenarios point toward $500 billion or more as issuance, compliance, and settlement gradually migrate on chain. The shift isn’t about novelty – it’s about making capital more programmable and settlement more continuous.

Balance-sheet crypto becomes a source of demand: Public companies now collectively control over one million Bitcoin, representing several percent of total supply. By 2026, digital-asset treasury vehicles could hold well north of $200 billion in crypto. This creates a potentially powerful demand channel in constructive markets – a dynamic explored further in this week’s data story.

ICOs and information markets return under clearer rules: With the GENIUS Act in effect since July 18 and the CLARITY Act awaiting Senate action, the U.S. regulatory backdrop is becoming more defined. Within that context, on-chain primary markets are reopening in a more structured form. ICOs are quietly returning in more structured forms, with greater emphasis on compliance and disclosure, widening early-stage access beyond insiders and venture capital. Alongside this, prediction markets are scaling into the billions in volume, emerging as tools for pricing probabilities as much as speculation. Together, these markets expand participation, while demanding sharper selectivity and discipline.

The common thread across all of this is execution. In 2026, crypto’s progress is less about the next narrative or price milestone and more about whether these systems function reliably, compliantly, and at scale. The industry is moving from spectacle to structure – a shift that may prove more durable than any single cycle.

Bitcoin

BTC in 2026: Cycles redefined

Bitcoin enters 2026 in an unusual position. After peaking near $126,000 in 2025, it trades closer to $90,000 – a level that once sounded extreme but now reads as consolidation. That matters because 2026 sits on the “wrong” side of Bitcoin’s traditional four-year cycle.

Historically, major highs followed a halving by 12–18 months, then gave way to deep resets. The latest halving occurred in 2024, yet Bitcoin pushed to new highs both before and after it. If a fresh high were to emerge in 2026, it would challenge the idea that the halving alone still sets the clock.

From here, reclaiming the prior peak would require roughly a 40% move. Post-halving issuance runs at about 450 BTC per day, or roughly $15 billion of new supply per year at current prices. Citi’s 2026 projection around $143,000 implies that ETF and institutional inflows would need to consistently absorb that supply.

More broadly, expectations for 2026 lean toward positive but steadier returns, with slower, institutional demand potentially cushioning downside moves. If Bitcoin does trend higher, it may look less like a frenzy –  and more like a grind.

Ethereum

ETH in 2026: The year of scaling up

Ethereum’s 2026 outlook centers on whether it can scale meaningfully without compromising decentralization. The roadmap runs on two tracks: expanding rollup data capacity through blobs, and reworking base-layer execution through zero-knowledge validation.

The first track is already live. Fusaka, activated in December 2025, laid the groundwork for PeerDAS and gradual blob parameter increases. Blob targets are designed to rise incrementally – potentially up to 48 blobs per block, allowing rollup throughput to scale while keeping node requirements in check. The key question for 2026 is whether demand continues to express itself through blobs rather than bidding up L1 fees.

The second track is more transformative. In 2026, Ethereum expects its first validators to verify ZK execution proofs instead of re-executing transactions, a shift comparable in scope to the Merge. Around 10% of validators may adopt ZK validation, enabling higher gas limits without raising hardware requirements. While Ethereum currently processes roughly 30 TPS on L1, this transition sets a path toward significantly higher throughput over time.

And as a bold data point to watch: some projections outline scenarios where Ethereum’s TVL could rise materially in 2026, supported by stablecoin growth toward $500 billion and tokenized real-world assets approaching $300 billion – a view unpacked further below.

Macroeconomic roundup

Macro in 2026: The balancing act continues

The macro backdrop heading into 2026 is defined by tension rather than clarity. After three insurance rate cuts, the Federal Reserve begins the year with inflation still above target and a labor market that is cooling but not breaking – pointing to a cautious, data-dependent policy path.

With Jerome Powell remaining chair until May, early-year policy is likely to stay on hold. Markets broadly price one rate cut in the first half of 2026, with further easing dependent on inflation convincingly trending toward 2%. Unemployment is expected to hover in the mid-4% range, while fiscal stimulus, tariffs, and political pressure remain key variables.

Markets enter the year at elevated levels. The S&P 500 pushing toward 7,000 increases sensitivity to shifts in rate expectations, while gold above $4,500/oz and silver above $82/oz point to sustained demand for inflation hedges and diversification. Meanwhile, the dollar weakened materially through 2025, with the U.S. Dollar Index down around 10% year-on-year, positioning the greenback near multi-year lows. If that trend persists, 2026 may continue to favor commodities and real assets – while leaving limited margin for policy missteps.

The year’s most interesting data story

The Bitcoin corporate treasury pillar

Corporate adoption is becoming a durable pillar of Bitcoin demand. Since January 2023, corporate Bitcoin treasuries have expanded from roughly 197,000 BTC to more than 1.08 million BTC, a ~450% increase, with U.S.-based companies accounting for most of the largest holdings.

Looking into 2026, this matters because balance-sheet holders typically operate on longer time horizons, adding demand that is less sensitive to short-term price swings. As more firms explore Bitcoin as a strategic reserve asset rather than a trade, corporate treasuries may play a growing role in shaping liquidity, volatility, and supply dynamics over the year ahead.

The numbers

The year’s most interesting numbers

$5,000 — The level ETH needs to reclaim and hold in 2026 to break decisively out of its post-2021 range.

$82 — Silver’s new high sets the bar for 2026, with volatility likely if rate cuts and geopolitics stay in play.

18% — The market-priced chance of a Fed rate cut at the January meeting, pointing to a cautious start before potential easing later in 2026.

$46.7 billion — The capital crypto ETFs absorbed in 2025, forming a high base for institutional flows heading into 2026.

65% — VanEck’s bullish signal for Bitcoin upside following periods of declining network hashrate.

Hot topic

What the community is discussing

Let’s hope 2026 brings all of that and more for ETH.

Here is to another year of not-selling.

The Apex Asset sounds fitting for Bitcoin.

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