Original Title: 26 Crypto, Bitcoin, DeFi, and AI Predictions for 2026

Original Source: Galaxy Research

Original Compilation: Deep Tide Techflow

Introduction

It feels somewhat anticlimactic that Bitcoin appears set to end 2025 at roughly the same price level it started the year.

For the first ten months of the year, the cryptocurrency market experienced a genuine bull run. Regulatory reforms made progress, ETFs continued to attract inflows, and on-chain activity increased. Bitcoin (BTC) reached a new all-time high of $126,080 on October 6.

However, the market’s euphoria failed to deliver the expected breakout and was instead defined by rotation, repricing, and readjustment. A combination of macroeconomic disappointments, shifting investment narratives, leverage liquidations, and significant whale selling threw the market off balance. Prices slid, confidence cooled, and by December, BTC had retreated to just over $90,000, though the journey was anything but smooth.

While 2025 may end with a price decline, the year still witnessed real institutional adoption and laid the groundwork for the next phase of real-world implementation in 2026. We anticipate that in the coming year, stablecoins will surpass traditional payment networks, asset tokenization will gain traction in mainstream capital and collateral markets, and enterprise-grade Layer-1 (L1) blockchains will move from pilot phases to actual settlement. Furthermore, we expect public blockchains to rethink their value capture mechanisms, DeFi and prediction markets to continue expanding, and AI-driven payments to finally materialize on-chain.

Below are Galaxy Research’s 26 predictions for the crypto market in 2026, along with a review of last year’s predictions.

2026 Predictions

Bitcoin Price

Bitcoin will reach $250,000 by the end of 2027.

The market in 2026 is too chaotic to predict, but the possibility of Bitcoin setting a new all-time high in 2026 remains. Current options markets indicate roughly equal probabilities of Bitcoin reaching either $70,000 or $130,000 by the end of June 2026, and similarly equal probabilities of $50,000 or $250,000 by the end of 2026. These wide price ranges reflect uncertainty about the near-term market. As of this writing, the entire crypto market is deep in a bear phase, and Bitcoin has yet to re-establish its bullish momentum. Until Bitcoin’s price re-establishes itself in the $100,000 to $105,000 range, we believe downside risks persist in the short term. Other factors in the broader financial markets also add uncertainty, such as the pace of AI capital expenditure deployment, monetary policy conditions, and the U.S. midterm elections in November.

Over the past year, we observed a structural decline in Bitcoin’s long-term volatility levels—partly due to the introduction of larger-scale covered option/Bitcoin yield generation programs. Notably, the Bitcoin volatility curve now prices implied volatility for put options higher than for call options, which was not the case six months ago. In other words, we are evolving from a skew typically seen in developing, growth-oriented markets toward one more akin to traditional macro assets.

This maturation trend is likely to continue, and regardless of whether Bitcoin declines further toward its 200-week moving average, the asset class’s maturity and institutional adoption are increasing. 2026 might be an unremarkable year for Bitcoin, whether it ends at $70,000 or $150,000, and our bullish outlook for Bitcoin (long-term) only grows stronger. With increasing institutional access, loosening monetary policy, and a growing need for non-dollar safe-haven assets, Bitcoin is likely to follow gold’s path over the next two years, becoming widely accepted as a hedge against currency debasement.

— Alex Thorn

Layer-1 and Layer-2

The total market capitalization of Solana’s Internet Capital Market will surge to $2 billion (currently around $750 million).

Solana’s on-chain economy is maturing, transitioning from meme-driven activity to successful launches of real revenue-oriented business models. This shift is facilitated by improvements in Solana’s market structure and increased demand for tokens with fundamental value. As investors increasingly favor supporting sustainable on-chain businesses over transient meme cycles, the Internet Capital Market will become a core pillar of Solana’s economic activity.

— Lucas Tcheyan

At least one general-purpose Layer-1 blockchain will embed a revenue-generating application that directly accrues value to its native token.

As more projects rethink how L1s capture and sustain value, blockchains are evolving toward designs with more explicit functionality. The success of Hyperliquid’s embedded revenue model in its perpetual contract trading platform, coupled with the trend of economic value capture shifting from the protocol layer to the application layer (i.e., the “fat application theory”), is redefining expectations for neutral base layers. An increasing number of chains are exploring whether certain revenue-generating infrastructure should be directly embedded into the protocol to strengthen token economic models. Ethereum founder Vitalik Buterin’s recent call for low-risk, economically meaningful DeFi to justify ETH’s value further underscores the pressure on L1s. MegaEth plans to launch a native stablecoin that returns revenue to validators, while Ambient’s AI-focused L1 plans to internalize inference fees. These examples indicate that blockchains are increasingly willing to control and monetize key applications. In 2026, a major L1 may formally embed a revenue-generating application at the protocol layer and direct its economic benefits directly to the native token.

— Lucas Tcheyan

Solana’s inflation reduction proposal will not pass in 2026, and the existing proposal SIMD-0411 will be withdrawn.

Solana’s inflation rate has been a focal point of community debate over the past year. Although a new inflation reduction proposal (SIMD-0411) was introduced in November 2025, consensus on the optimal solution remains elusive, and a view is gradually forming that the inflation issue distracts from more critical priorities, such as implementing Solana’s market microstructure adjustments. Moreover, changes to SOL’s inflation policy could affect its future market perception as a neutral store of value and monetary asset.

— Lucas Tcheyan

Enterprise-grade L1s will move from pilot phases to genuine settlement infrastructure.

At least one Fortune 500 bank, cloud provider, or e-commerce platform will launch a branded enterprise-grade L1 blockchain in 2026, settling over $10 billion in real economic activity and operating a production-grade bridge connected to public DeFi. Previous enterprise chains were largely internal experiments or marketing exercises, while the next wave will more closely resemble application-specific base layers designed for particular verticals, with validation layers licensed by regulated issuers and banks, and public chains used for liquidity, collateral, and price discovery. This will further highlight the distinction between neutral public L1s and enterprise-grade L1s that integrate issuance, settlement, and distribution functions.

— Christopher Rosa

The ratio of application-layer revenue to network-layer revenue will double in 2026.

As trading, DeFi, wallets, and emerging consumer applications continue to dominate on-chain fee generation, value capture is shifting from the base layer to the application layer. Simultaneously, networks are structurally reducing MEV (Miner Extractable Value) leakage and pursuing fee compression on L1s and L2s, leading to a shrinking revenue base at the infrastructure layer. This will accelerate value capture at the application layer, allowing the “fat application theory” to continue outpacing the “fat protocol theory.”

— Lucas Tcheyan

Stablecoins and Asset Tokenization

The U.S. Securities and Exchange Commission (SEC) will provide some form of exemption for the use of tokenized securities in DeFi.

The SEC will provide some form of exemption to allow the development of on-chain tokenized securities markets. This may come in the form of a so-called “no-action letter” or a new “innovation exemption,” a concept repeatedly mentioned by SEC Chair Paul Atkins. This would permit legitimate, non-wrapped forms of on-chain securities into DeFi markets, rather than merely using blockchain technology for back-office capital market activities as seen in the recent DTCC “no-action letter.” Early stages of formal rulemaking are expected to begin in the second half of 2026 to establish rules for brokers, dealers, trading platforms, and other traditional market participants using cryptocurrencies or tokenized securities.

— Alex Thorn

The SEC will face litigation from traditional market participants or industry groups over its “innovation exemption” plan.

Some segment of traditional finance or banking—whether trading firms, market infrastructure, or lobbying groups—will challenge regulators’ provision of exemptions to DeFi applications or crypto companies, arguing that comprehensive rules to govern the expansion of tokenized securities have not been established.

— Alex Thorn

Stablecoin transaction volume will surpass the ACH system.

Stablecoins exhibit significantly higher velocity compared to traditional payment systems. We have already seen stablecoin supply grow consistently at a 30%-40% compound annual growth rate (CAGR), with transaction volume increasing accordingly. Stablecoin transaction volume has already surpassed major credit card networks like Visa and currently processes roughly half the volume of the Automated Clearing House (ACH) system. As definitions under the GENIUS Act are finalized in early 2026, we may see stablecoin growth rates exceed their historical averages, as existing stablecoins continue to grow and new entrants compete for this expanding market share.

— Thad Pinakiewicz

Stablecoins partnered with traditional finance (TradFi) will accelerate consolidation.

Despite numerous stablecoin launches in the U.S. in 2025, the market struggles to support a large number of widely used options. Consumers and merchants will not use multiple digital dollars simultaneously; they will gravitate toward one or two stablecoins with the broadest acceptance. We already see this consolidation trend in how major institutions are partnering: nine major banks (including Goldman Sachs, Deutsche Bank, Bank of America, Santander, BNP Paribas, Citigroup, Mitsubishi UFJ Financial Group, TD Bank Group, and UBS) are exploring plans to launch stablecoins based on G7 currencies; PayPal and Paxos teamed up to launch PYUSD, combining a global payment network with a regulated issuer.

These cases demonstrate that success depends on distribution scale—the ability to access banks, payment processors, and enterprise platforms. Expect more stablecoin issuers to partner or integrate systems to compete for meaningful market share.

— Jianing Wu

A major bank or broker will accept tokenized stocks as collateral.

To date, tokenized stocks remain on the fringes, limited to DeFi experiments and private blockchains piloted by major banks. But core infrastructure providers in traditional finance are now accelerating their transition to blockchain-based systems, with increasing regulatory support. In the coming year, we may see a major bank or broker begin accepting tokenized stocks as on-chain deposits and treating them as fully equivalent to traditional securities.

— Thad Pinakiewicz

Card payment networks will connect to public blockchains.

At least one of the top three global card payment networks will settle over 10% of its cross-border transaction volume via public chain stablecoins in 2026, though most end-users likely won’t interface with cryptocurrency. Issuers and acquirers will still display balances and liabilities in traditional formats, but in the backend, a portion of net settlement between regional entities will be conducted via tokenized dollars to reduce settlement cut-off times, pre-funding requirements, and correspondent banking risk. This development will position stablecoins as core financial infrastructure within existing payment networks.

— Christopher Rosa

DeFi

Decentralized exchanges (DEXs) will capture over 25% of spot trading volume by the end of 2026.

Although centralized exchanges (CEXs) still dominate liquidity and are responsible for onboarding new users, several structural changes are driving more spot trading activity on-chain. The two most obvious advantages of DEXs are permissionless access without KYC (Know Your Customer) and more economically efficient fee structures, which are increasingly attractive to users and market makers seeking lower friction and higher composability. Currently, DEXs account for approximately 15%-17% of spot trading volume, depending on the data source.

— Will Owens

DAO treasury assets governed via futarchy will exceed $500 million.

Building on our prediction a year ago that futarchy would see broader adoption as a governance mechanism, we now believe it has demonstrated sufficient effectiveness in real-world applications for decentralized autonomous organizations (DAOs) to begin using it as the sole decision-making system for capital allocation and strategic direction. Consequently, we expect total DAO treasury assets governed via futarchy to exceed $500 million by the end of 2026. Currently, approximately $47 million in DAO treasury assets are fully governed by futarchy. We believe this growth will primarily come from newly established futarchy DAOs, with some contribution from treasury growth in existing futarchy DAOs.

— Zack Pokorny

Total crypto-backed loan balances will surpass $90 billion in a quarter-end snapshot.

Following momentum from 2025, the total volume of crypto-backed loans in decentralized finance (DeFi) and centralized finance (CeFi) is expected to continue expanding in 2026. On-chain dominance (i.e., the share of loans issued via decentralized platforms) will continue to rise as institutional participants increasingly rely on DeFi protocols for lending activities.

— Zack Pokorny

Stablecoin rate volatility will remain mild, and DeFi borrowing costs will not exceed 10%.

With growing institutional participation in on-chain lending, we expect deeper liquidity and more stable, slower-moving capital to significantly reduce interest rate volatility. Simultaneously, arbitrage between on-chain and off-chain rates is becoming easier, while barriers to accessing DeFi are rising. Off-chain rates are expected to decline further in 2026, which will keep on-chain borrowing rates low—even during bull markets, off-chain rates will serve as an important floor.

The core thesis is:

(1) Institutional capital brings stability and persistence to DeFi markets;

(2) A declining off-chain rate environment will keep on-chain rates below typical levels during expansionary periods.

— Zack Pokorny

The total market capitalization of privacy tokens will exceed $100 billion by the end of 2026.

In Q4 2025, privacy tokens gained significant market attention as on-chain privacy became a focus with more investor funds moving on-chain. Among the top three privacy tokens, Zcash rose approximately 800% in the quarter, Railgun rose about 204%, while Monero saw a more modest 53% increase. Early Bitcoin developers, including pseudonymous founder Satoshi Nakamoto, discussed ways to make transactions more private or even fully anonymous, but practical zero-knowledge technology was not widely available or ready for deployment at the time.

As more funds are held on-chain, users—particularly institutions—are beginning to question whether they truly want their crypto asset balances fully publicly displayed. Whether fully anonymous designs or mixer-style approaches ultimately prevail, we expect the total market capitalization of privacy tokens to exceed $100 billion by the end of 2026, compared to CoinMarketCap’s current valuation of approximately $63 billion.

— Christopher Rosa

Polymarket’s weekly trading volume will consistently exceed $1.5 billion in 2026.

Prediction markets have become one of the fastest-growing categories in crypto, and Polymarket’s weekly notional trading volume is already approaching $1 billion. We expect this figure to consistently exceed $1.5 billion in 2026, driven by new capital efficiency layers enhancing liquidity and AI-driven order flow increasing trading frequency. Polymarket’s distribution capabilities are also improving, accelerating capital inflows.

— Will Owens

TradFi

Over 50 spot altcoin ETFs and an additional