2026: Asset digitization enters the institutionalization stage, Grayscale highlights seven key variables

After years of high volatility and narrative-driven cyclical patterns, crypto assets are entering a qualitatively different stage. Rising systemic risks, gradually improving regulatory frameworks, along with the advancement of spot exchange-traded products(ETP), stablecoin legislation, and institutional allocations, are reshaping the way capital flows into the crypto market.

According to Grayscale’s latest publication, “Digital Asset Outlook 2026,” the dominant market forces are shifting from retail cycles to institutional capital. Price volatility is no longer primarily driven by emotional surges but increasingly influenced by regulated channels, long-term capital, and fundamentals, rendering the traditional “four-year cycle theory” ineffective.

Market Turning Point: Moving from Retail-Driven to Institutional Era

Grayscale forecasts that 2026 will accelerate the structural transformation of digital asset investments, driven by two main themes: rising macro demand for alternative stores of value and significant improvements in regulatory clarity.

The combined effect of these factors is expected to attract new sources of capital, expand digital asset adoption (especially among wealth management advisors and institutional investors), and promote integration of public blockchains into mainstream financial infrastructure. Based on these trends, Grayscale believes that digital asset valuations will generally rise in 2026, marking the end of the “four-year cycle theory.”

Research institutions anticipate Bitcoin prices may hit record highs in the first half of the year. If bipartisan support for U.S. structural crypto legislation is achieved, it could become law in 2026. This would further deepen the integration of public chains with traditional finance, promote regulated trading of digital securities, and enable startups and established companies to issue on-chain assets.

Seven Investment Themes Driving Crypto Market Development

1. Fiat Currency Devaluation Risks Spark Demand for Alternative Stores of Value

Related Assets: BTC ($90.61K, -0.12%), ETH, ZEC ($400.99, +1.83%)

The U.S. economy faces structural debt issues, which could pressure the dollar’s store of value role in the medium term. Only a few digital assets with broad adoption, highly decentralized networks, and limited supply growth have the potential to serve as stores of value—Bitcoin and Ethereum are prime candidates.

Bitcoin’s total supply is permanently capped at 21 million coins, determined solely by protocol rules. Specifically, the 20 millionth Bitcoin will be mined in March 2026. This transparent, predictable, and ultimately scarce monetary system becomes increasingly attractive amid rising fiat devaluation risks.

2. Regulatory Clarity Promotes Widespread Adoption of Digital Assets

Affecting Nearly All Assets

In 2025, the U.S. made key progress in crypto regulation: the GENIUS Act(stabilizes stablecoin legislation) was approved, SEC SAB 121( was rescinded, general standards for ETP listing were introduced, and issues with bank access for crypto firms began to resolve.

Looking ahead to 2026, structural market legislation is expected to gain bipartisan support and become law. The House passed its version of the “Clarity Act”), and the Senate has initiated its legislative process. While details are still being negotiated, the overall framework will provide a set of rules similar to traditional finance, covering registration and disclosure requirements, asset classification standards, and insider trading regulations.

( 3. Stablecoin Ecosystem Accelerates Expansion

Related Assets: ETH, TRX )$0.30, -0.30%###, BNB, SOL ($139.48, +2.16%), XPL, LINK

2025 saw a true “explosive” growth in stablecoins: circulating supply reached about $300 billion, with average monthly trading volume of approximately $1.1 trillion over six months as of November. The U.S. Congress passed the GENIUS Act, prompting large institutional capital inflows.

In 2026, these changes are expected to translate into concrete applications: stablecoins will be more widely integrated into cross-border payments; used as collateral on derivatives exchanges; incorporated into corporate balance sheets; and serve as online payment alternatives to credit cards for consumers. Growing market expectations could further boost stablecoin demand.

( 4. Asset Tokenization Reaches a Critical Turning Point

Related Assets: LINK, ETH, SOL, AVAX )$13.61, -1.44%###, BNB, CC ($0.14, +4.67%)

Currently, asset tokenization remains marginal, accounting for roughly 0.01% of the total market cap of global equities and bonds. As blockchain technology matures and regulatory clarity improves, tokenized assets are expected to accelerate in growth—Grayscale projects a potential 1,000-fold increase by 2030.

This expansion is likely to create significant value for blockchain platforms and related applications handling tokenized asset trading. Ethereum(ETH), BNB Chain(BNB), and Solana(SOL) are currently leading players, but this landscape may change. Among supporting applications, Chainlink(LINK) stands out for its comprehensive technical suite.

( 5. Mainstream Public Chains Drive Demand for Privacy Solutions

Related Assets: ZEC, AZTEC, RAIL

Privacy is a fundamental element of financial systems. Most people expect information such as income, taxes, wealth, and spending habits not to be publicly recorded. However, most current blockchains are designed to be highly transparent. To deepen integration with financial systems, public chains must develop more mature and robust privacy infrastructure—this is increasingly evident as regulation pushes blockchain into traditional finance.

Zcash)ZEC### is a decentralized digital currency similar to Bitcoin but with built-in privacy features, suitable for hedging against dollar devaluation in portfolios. Other projects like Aztec(Ethereum privacy Layer 2) and Railgun(DeFi privacy middleware) are also important.

( 6. AI Centralization Spurs Demand for Blockchain-Based Solutions

Related Assets: TAO )$281.80, -0.97%###, IP ($2.63, +23.52%), NEAR ($1.67, -2.18%), WORLD

The synergy between AI and crypto has never been clearer or more powerful. AI systems are concentrated in a few large companies, raising trust, bias, and ownership concerns; crypto provides foundational tools to directly address these risks.

For example, decentralized AI development platforms like Bittensor aim to reduce reliance on centralized AI; World offers verifiable “proof of personhood”(Proof of Personhood) to distinguish real humans from AI in environments flooded with synthetic activity; networks like Story Protocol provide on-chain transparency and traceability for intellectual property.

( 7. DeFi Accelerates, Lending Leading the Way

Related Assets: AAVE )$164.16, -1.37%###, MORPHO ($1.29, +0.01%), MAPLE, KMNO ($0.06, -0.34%), UNI ($5.38, -2.22%), AERO ($0.57, +5.57%), RAY ($1.17, -1.32%), JUP ($0.21, -2.77%), HYPE ($23.86, -2.47%), LINK

Driven by technological maturity and improved regulation, DeFi applications accelerated significantly in 2025. While stablecoins and tokenized assets were the highlights, DeFi lending also expanded notably, led by protocols like Aave, Morpho, and Maple Finance. Meanwhile, decentralized perpetual futures exchanges(like Hyperliquid) are catching up with, and sometimes surpassing, major centralized derivatives exchanges in open interest and daily trading volume.

Looking ahead, increased liquidity, better interoperability among protocols, and closer ties to real-world prices will make DeFi an effective alternative for those seeking direct on-chain financial activities.

( 8. Mainstream Adoption Spurs Infrastructure Upgrades

Related Assets: SUI )$1.77, -2.06%###, MON ($0.02, -5.97%), NEAR, MEGA

New blockchain projects continue to push technological boundaries. However, some investors believe there is no need for additional block space, as existing blockchains have not yet fully absorbed current demand. Solana has long been viewed as an example of “excess block space,” until a new wave of applications made it one of the industry’s biggest success stories.

While not all high-performance blockchains will follow Solana’s path, some may stand out. These new networks offer unique advantages in emerging use cases like AI micro-payments, real-time gaming, on-chain high-frequency trading, and intent-based systems. Among these, Sui is expected to stand out due to its technological leadership and highly integrated development approach.

( 9. Focus on Sustainable Revenue Generation

Related Assets: SOL, ETH, BNB, HYPE, PUMP )$0.00, -3.73%###, TRX

While blockchain is not a traditional enterprise, it has quantifiable fundamentals: user count, transaction volume, fees, total value locked(TVL), developer count, and number of applications. Among these, Grayscale considers transaction fees the most valuable fundamental indicator because it is difficult to manipulate and easy to compare across blockchains.

From a traditional corporate finance perspective, transaction fees are akin to “revenue.” For blockchain applications, distinguishing between protocol-level and supply-side fees/revenues is important. As institutional investors systematically enter crypto, they are expected to focus more on blockchains and applications with high or growing fee/revenue levels(excluding Bitcoin).

Currently, among smart contract platforms, TRX, SOL, ETH, and BNB have relatively high fee revenues; in application assets, projects like HYPE and PUMP show strong revenue performance.

( 10. Investors’ “Default Choice”: Staking

Related Assets: LDO )$0.62, -3.44%###, JTO ($0.43, -4.91%)

In 2025, U.S. policymakers made two key modifications to staking regulations, opening the door for broader participation: the SEC clarified that liquid staking does not constitute a security transaction; the IRS and Treasury confirmed that investment trusts and ETPs can stake digital assets.

Regulatory guidance on liquid staking services is expected to directly benefit protocols like Lido and Jito—leading liquid staking providers on Ethereum and Solana, respectively. More broadly, if ETPs can participate in staking, “staking as the default holding method” could become the standard for PoS token investments, increasing overall staking rates and exerting downward pressure on staking yields.

“False Signals” in 2026

Two hotly debated topics are unlikely to have substantial impact on crypto market dynamics in 2026:

Quantum Computing Threats: Although progress in quantum computing may continue, most blockchains will need to upgrade their cryptography. Experts believe that quantum computers capable of breaking Bitcoin’s encryption will not arrive before 2030. Community research and preparations for quantum risks are expected to accelerate in 2026, but this theme is unlikely to influence prices in the short term.

Digital Asset Custody Companies(DATs): While Michael Saylor’s strategy of including digital assets on corporate balance sheets inspired dozens of imitators in 2025, current estimates suggest DATs hold about 3.7% of Bitcoin’s total supply, 4.6% of Ethereum’s, and 2.5% of Solana’s. However, demand has cooled since mid-2025. Most DATs do not use excessive leverage(or any leverage), making forced liquidations in a bear market unlikely. We expect most DATs to operate like closed-end funds, with few actively liquidating assets.

Outlook: Institutional Capital Becomes the New Market Driver

The outlook for digital assets in 2026 remains positive, driven by two forces: macro demand for alternative stores of value and improved regulatory clarity. The key theme next year may be the strengthening of links between blockchain finance and traditional finance, supported by ongoing institutional capital inflows.

Tokens adopted by institutions tend to have clear use cases, sustainable revenue models, and access to regulated markets and applications. Investors are likely to see an expanding range of investable crypto assets via ETPs, and in some cases, staking may become the default mode. Meanwhile, regulatory clarity and institutionalization will raise the entry barriers for mainstream success.

In this process, not all tokens will successfully transition from old paradigms to new ones. What is certain is that the crypto industry is entering a new era, with market structures undergoing profound change.