The Bitcoin (and crypto) outlook for 2026

A year is a long time in crypto.

12 months ago, investors were celebrating the pending inauguration of Trump 2.0, the born-again pro-crypto president who promised to make the US the "crypto capital of the world."

12 months earlier, the approval and launch of spot Bitcoin ETFs helped spur a new bull run after years of soul-searching among crypto advocates. 

But as 2026 gets up and running, the outlook for Bitcoin and crypto is much harder to pin down. Despite reaching a record price in October (~US$127,000), the sentiment around Bitcoin has fallen away in recent months, along with its price, even as it's recently edged back above US$90,000.

Sentiment is even worse across the wider crypto markets, with many smaller cryptocurrencies ending 2025 at years-long lows. "‘Crypto’ had a Bear Market in 2025, no question," said Ryan McMillin, Chief Investment Officer of digital asset fund Merkle Tree Capital. "The smaller the market cap, the greater the pain." 

Smaller cryptocurrencies have seen bigger drawdowns recently

Now crypto's much-vaunted four-year cycle (which revolves around the Bitcoin halving, where the supply of new Bitcoin is cut in half) faces its stiffest test since Bitcoin's inception in 2009.

Conventional wisdom would suggest 2026 is the year Bitcoin (and crypto more broadly) experiences a substantial selloff after three years of positive price movement. But 2025 bucked the trend on that front, with Bitcoin recording a 6% drop over the calendar year.

So while history would tell you to expect a damaging bear market is on the horizon, there's an argument to be made that 2025 may have filled that brief already, and we are now in a new paradigm where the historic four-year cycle no longer applies. 

While Trump has manifestly disappointed many crypto proponents since retaking office a year ago, there are some regulatory tailwinds building in the background, and big strides are being made elsewhere in the crypto industry in terms of stablecoin adoption and the tokenisation of other assets. Other blue-chip cryptocurrencies have also been given the ETF green light, opening up more of the crypto market to institutional and retail investors. 

It leaves 2026 as a defining year in Bitcoin's (and crypto's) history. 

"I’m very bullish on Bitcoin in 2026," says Merkle Tree's McMillin.

The launch of Bitcoin ETFs in 2024 has changed the market dynamic of the leading cryptocurrency, and with that came expected growing pains. 

"2025 was the 'painful digestion year'. I talked about this as the IPO moment for Bitcoin - there are parallels with big IPOs like Facebook, when capital markets first get their chance to participate there are initially more sellers than buyers as sellers have been sitting on fantastic paper gains that they can not realise until the liquidity of a $100 trillion capital market like the US equity market can take over the early holders as they pair down their exposure."

Where previous Bitcoin cycles have seen rapid price appreciation (the classic mania stage of a bubble), the market behaviour and price action in 2025 paints a different picture of where Bitcoin's market cycle finds itself. 

"That’s not what you expect at the euphoric end of a classic four-year cycle, it looks more like a mid-cycle flush in an asset that’s being institutionalised," says McMillin.

"We already had a meaningful drawdown and a negative year for both BTC and ETH in 2025, despite record ETF inflows and major regulatory wins. That’s not how a euphoric terminal blow-off usually looks; it’s how a market behaves when new structural buyers meet old-school volatility."

"I think the old four-year playbook is breaking down, and 2025 already was the “bear” for this cycle."

Is Bitcoin still in a bull market?

Bridget Nichols, Chief Commercial Officer at Bitcoin ETF provider Monochrome, shares a similar view on Bitcoin's four-year cycle.

"What we are more likely to see in 2026 is rolling consolidation, rather than a sharp, singular bear market," Nichols said. "Post-halving performance following the 2024 event has been materially weaker than prior cycles, suggesting diminishing marginal impact from supply shocks alone."

"The four-year cycle isn't dead, but it's definitely being reshaped."

But she has a more moderate outlook overall on where Bitcoin goes in 2026. 

"The current environment feels like one where the fat is being trimmed, not one where a severe bear market is immediately upon us," she said. "Leverage is being reduced, positioning is resetting, and the market is transitioning from liquidity-driven upside to fundamentals-driven price discovery."

"Heading into 2026, my view on Bitcoin is constructively neutral. Supply dynamics alone are no longer sufficient to drive sustained upside, and price action is increasingly dictated by liquidity conditions and capital allocation decisions."

In other words, Bitcoin is maturing as an asset class, and this could mean market participants at both ends want more this year.

"2026 may prove choppier than bulls expect, but materially less severe than traditional four-year-cycle bears anticipate."

The key trends to watch

While it's increasingly hard to predict Bitcoin and crypto's trajectory using historical trends, both McMillin and Nichols have identified two under-looked developments that could dictate crypto's performance in 2026.

"The four-year cycle nobody talks about"

According to Nichols, another cyclical dynamic is currently being overlooked in favour of the historic four-year Bitcoin cycles, yet it also has an outsized impact on crypto markets. 

"If investors are focused solely on Bitcoin’s halving cycle, they may be missing a far more influential force unfolding in global bond markets," she says.

"The massive issuance of corporate and government bonds during the pandemic's near-zero interest rate environment is now coming home to roost in 2025-2026. US$33 trillion in corporate and government debt will mature across advanced economies in 2026. That's nearly three times these economies' yearly capital expenditures, and it represents a ~20% jump from 2025 levels."

"When these bonds come due, companies will face a brutal reality: they must refinance debt originally issued during the 2020-2021 low-rate environment at rates that are now 3-5% higher."

"The debt maturity timeline suggests 2026 may see a liquidity-driven correction rather than a traditional crypto-winter bear market, followed by potential Fed policy easing that benefits Bitcoin."

She breaks down the consequences for Bitcoin as a three-part sequence: the "liquidity peak", the "refinancing crunch" and the "policy response".

The liquidity peak, which we've seen over the last few years, means "corporate balance sheets still look healthy, central banks have paused their rate hikes, and liquidity continues flowing into risk assets. Bitcoin benefits from this abundant liquidity environment, sustaining price rallies and positive sentiment."

This year, we'll enter a refinancing crunch in which corporations are forced to refinance debt at higher rates, removing liquidity from markets, including Bitcoin.

"Historical data shows Bitcoin lags monetary changes by 56-60 days," says Nichols. "There's an incubation period during which liquidity filters through financial systems before affecting speculative assets. This creates a roughly four to six-month window from initial refinancing stress to maximum Bitcoin price impact. If corporate refinancing stress hits in Q2-Q3 2026, expect Bitcoin to feel the full force by Q4 2026."

This tightening, in turn, may force action from central banks, the "policy response" stage, where fresh liquidity propels assets like Bitcoin higher again.

"If the Federal Reserve and other central banks are forced to ease policy through rate cuts or quantitative easing, the resulting liquidity injection could fuel a strong Bitcoin recovery," says Nichols.

"If these three acts broadly play out, that would support a cycle extension theory (i.e. beyond the traditional four-year Bitcoin-cycle) where Bitcoin's volatility continues into 2026, but any weakness sets up 2027-2028 strength as central banks re-ease policy."

Moving on-chain

According to McMillin, the key development for crypto in 2026 will be the continued expansion of "tokenisation", in which real-world assets, such as currencies or stocks, are migrated onto a crypto network where they can be managed, traded and stored. 

"Tokenisation is emerging as a mainstream trend this year," he says. "Larry Fink continues to talk about everything moving on-chain, and I even hear non-crypto peers talking about tokenising funds in 2026." 

"This will be a major catalyst for showcasing the utility of crypto this year, and we expect the original tokenised asset, the dollar via stable coin, to at least double from $300 billion in issuance to over $600 billion by year end. This is a new buyer of treasuries which the Trump administration will be backing heavily."

Once a niche pipe dream of crypto developers, tokenisation is quietly emerging as the key use case through which crypto can insert itself into mainstream financial markets. 

The tokenisation of real assets has exploded in recent years

"Real World Assets (another term for tokenisation) tripled each of the last three years and this will soon go from a beta test phase and a novelty to mainstream," says McMillin. "We also expect crypto exchanges will muscle in on equities, offering 24/7 trading of highly-liquid tokenised stocks (TSLA, NVDA, etc) at a fraction of the price of traditional brokerage. BlackRock, already a major issuer of tokenised securities, will also accelerate their issuance."

If 2026 becomes the breakthrough year for tokenisation, it could prove a crucial catalyst for the wider crypto markets currently being left behind by Bitcoin, especially if it manages to evolve past its own four-year boom and bust cycle. 

With further regulatory certainty on the horizon (via the CLARITY Act and GENIUS Act), the US midterm elections, more ETFs, and potential monetary expansion, crypto is not short of tailwinds in 2026.

A year is a long time in crypto, and it's safe to assume a lot will happen. Where we end up is another question.