Crypto markets enter 2026 with stronger structural foundations than in previous cycles. More readable regulations, the expansion of the offer of financial products and an increased rapprochement with traditional finance are transforming the way in which digital assets are adopted and perceived. Coinbase's research leadership believes this momentum is likely to continue, rather than run out of steam.
In brief
- Clearer regulation in the United States and Europe has boosted institutional confidence and supported broader adoption of crypto in payments and markets.
- Crypto spot ETFs and digital asset treasuries have expanded regulated access, bringing crypto closer to traditional financial structures.
- Stablecoins and tokenized assets have advanced in payments, settlements and use as collateral, supporting continuously operating global markets.
- Investor demand has become more diversified and more long-term, reducing dependence on a single narrative or short-term speculation.
Interconnected forces are moving crypto toward core financial systems
David Duong, head of investment research at Coinbase, believes that the factors that supported crypto growth in 2025 are expected to strengthen in 2026. These drivers include exchange-traded funds, stablecoins, tokenization and the evolving regulatory framework. In a message published at the end of the year on Duong explained that these elements no longer progress in isolation, but now interact to gradually integrate crypto into central financial systems.
Crypto spot ETFs have been instrumental in 2025 by providing regulated access to digital assets. At the same time, corporate balance sheets have begun to incorporate cash into digital assets. At the same time, stablecoins and tokenized assets have expanded their use cases in payments, settlements and collateral mechanisms.
Duong also highlighted that approval times for ETFs have shortened. He added that stablecoins are occupying increasingly important roles in delivery-for-payment structures, while tokenized collateral is gaining recognition in traditional financial transactions.
Market data indicates that adoption has remained relatively stable during this transition phase. According to analytics firm Demand Sage, crypto usage stands at around 10%, rising from 10.3% at the start of 2023 to 9.9% in the first quarter of 2025. This development reflects sustained participation, rather than an alternation of phases of euphoria and marked decline.
Regulatory progress builds institutional trust
Regulatory advances have played a central role in consolidating institutional trust. In the United States, the authorities have moved towards clearer rules concerning stablecoins and the structuring of markets, in particular through the GENIUS Act.
In Europe, the approach has been strengthened with the entry into force of the Crypto-Asset Markets Regulation, known as MiCA. Duong explained that these regulatory frameworks now influence how companies evaluate their strategy, risk exposure and compliance obligations, while promoting broader participation.
Several developments have redefined the relationship between crypto and traditional finance in 2025:
- Faster ETF approvals have lowered barriers to entry for institutional investors.
- Stablecoins have expanded their role in payment and settlement flows.
- Tokenized assets have gained credibility as usable collateral.
- Clearer regulations have improved the operational preparedness of institutions.
- Compliance requirements have governed the development of new products.
Investor behavior has also evolved. Market activity is no longer dominated by a single narrative, but by a broader set of allocators and users. This diversification further ties crypto exposure to macroeconomic conditions, technological developments and geopolitical factors. According to Duong, this change promotes more stable capital flows and limits short-term speculation.
Crypto infrastructure shifts to applications and distribution
Technological development has followed a trajectory more oriented towards concrete uses over the past year. While the focus has largely been on artificial intelligence, crypto infrastructure has continued to mature. New layer 1 networks and wallets have emerged, but the focus has gradually shifted to applications and delivery channels. Continuously operating markets, connecting different regions and time zones, have become a central issue.
Public policy clarity has also changed the way many protocols approach value creation. Projects are increasingly adopting mechanisms such as token buyouts, fee sharing, or similar models, to more directly connect the value of tokens to real-world usage.
At the same time, institutional demand for oversight and control has spurred interest in privacy-focused payment systems. Zero-knowledge proofs and full homomorphic encryption contribute to wider adoption of protected transactions.
David Duong concludes that regulation, institutional structuring and the broadening of participation are now evolving in concert. Sustained attention to product quality, responsible oversight, and user-centered design could enable crypto to establish itself as a sustainable pillar of global finance, rather than just a niche alternative.
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