As a seasoned player in the field for many years, I see the crypto market in 2026 like a brewing storm. The clouds are thick, thunder can be faintly heard, but when the rain will come, and whether a gust of evil wind will blow the clouds away halfway, is really hard to say. Below are my personal views and do not constitute investment advice; everyone should weigh it themselves.
1. The Federal Reserve's 'body' is more honest than its 'mouth'
The market is watching the Federal Reserve's FOMC meeting, but in my view, the policy statements are just platitudes; the real signals are hidden in the actions. The Fed talks about 'caution', but buying $40 billion in short-term Treasury bonds every month is clearly a way to 'extend the life' of the financial system. Why do this? Because the banking system really lacks funds! The SOFR (Secured Overnight Financing Rate) is higher than the IORB (Interest on Reserve Balances), which means the cost of borrowing between banks is higher than the returns on savings; what else can this be but a 'money shortage'? Once liquidity dries up, both the stock and bond markets will collapse, and the Fed cannot sit idly by.
But don’t think that easing monetary policy means the crypto space will immediately surge. There’s an counterintuitive rule in financial markets: when policies are truly implemented, asset prices may actually drop first. Because institutions need to replenish margins, pay debts, and respond to redemptions, they first have to sell the most liquid assets (like Bitcoin). From the announcement of policies to money flowing into the crypto space, it will take at least 2-4 weeks of panic bottoming out. The flow of funds has an order: first large-cap stocks → small-cap stocks → Bitcoin → other mainstream coins; trying to get rich overnight can easily lead to choking.
2. 2026: Practical value is the hard truth.
What is the biggest change in the cryptocurrency space in 2025? It is the shift from speculative narratives to practical value. CoinShares' report directly defines 2026 as the 'Year of Practicality Winning.' What does this mean? Previously, the crypto space always wanted to disrupt traditional finance, but now it has become 'if you can't beat them, join them': stablecoin settlements, tokenization of U.S. government bonds, on-chain distribution of government bond yields... These 'hybrid financial' scenarios are being implemented. For example:
The scale of stablecoins exceeds 300 billion USD, and JPM Coin from JPMorgan has reduced corporate foreign exchange settlement time from days to seconds;
The asset tokenization of U.S. government bonds surged from 15 billion USD to 35 billion USD, and BlackRock's BUIDL fund size increased tenfold.
What does this mean? Institutions are no longer playing with cryptocurrencies for 'faith,' but rather to save and make money. However, this also means that pure concept-based altcoins will become increasingly difficult; projects that can generate cash flow (such as tokenized government bonds, on-chain buybacks) are the long-term winners.
3. Political cards: How long can Trump's 'honeymoon period' last?
After Trump took office, the crypto space indeed had a surge for a while: SEC leadership changes, Bitcoin ETF approvals, and even talk of creating a 'strategic Bitcoin reserve.' But how long can the political dividend last? I think it’s uncertain:
Trump's approval rating has dropped to 38%, and the resistance to policy advancement has increased;
Nobel economist Paul Krugman directly said: 'The price of Bitcoin has become a bet on 'Trumpism'—if the political wind shifts, the crypto space easily faces backlash.
Moreover, while regulation seems friendly, it actually hides risks. The U.S. GENIUS Act requires stablecoins to be backed by government bonds, which increases compliance but also ties the cryptocurrency space more closely to traditional finance. Once the bond market fluctuates (for example, if corporate bond issuance surges), it could chain-react and impact liquidity in the crypto space.
4. My operational thought: Hoard spot assets and wait for the wind to come.
My personal strategy for 2026 is 'mainly hold mainstream coins, with small bets on potential projects':
Mainstream coins first: Bitcoin and Ethereum have ETF support, and institutional allocation demand remains. Especially for Bitcoin, in case of an economic recession, it may surge to 150,000 USD due to its 'safe-haven attribute' (optimistic scenario).
Avoid high leverage: The largest short position in history (499 million USD) has exploded, and now market sentiment is fragile; excessive leverage can easily become fuel.
Focus on projects with real returns: such as tokenized government bonds, on-chain buyback agreements (like Hyperliquid using 99% of revenue to buy back tokens), these assets that can generate cash flow are more resilient to downturns.
Finally, a reminder: 2026 may be a key year for the cryptocurrency space to move from the margins to the mainstream, but don't imagine a 'bull market' as a continuous surge. The Federal Reserve's policies, the aftermath of the U.S. elections, and even geopolitical conflicts could interrupt the rhythm. What we need to do is not to predict every point accurately but to survive until the next cycle. After all, those who survive in the space are not the smartest, but the most cautious.
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