bitcoin According to Cantor Fitzgerald, it could be heading for a prolonged recession, but it is likely a prelude for the crypto industry to enter a more stable and institutionally driven phase.
Markets are likely in the early phase of a crypto winter, echoing bitcoin’s historic four-year cycle, according to a year-end report from analyst Brett Knoblauch. Bitcoin is about 85 days past its peak, and Knoblauch suggests prices could remain under pressure for months, possibly even testing Strategy’s (MSTR) average breakeven price near $75,000.
However, unlike past crises, this one may not be defined by mass liquidations or structural failures. Institutional participants, not retail traders, are now shaping the contours of the market, according to Knoblauch, who identified a growing gap between token price performance and what’s really happening under the hood, especially in decentralized finance (DeFi), tokenized assets and crypto infrastructure.
Take tokenization of real-world assets (RWA) as an example. According to the report, the value of on-chain tokenized RWA (assets such as credit products, US Treasuries and stocks) has tripled over the year to $18.5 billion. Cantor said the amount could exceed $50 billion by 2026, and the pace will accelerate as more financial institutions experiment with on-chain settlement.
Change is also occurring in the way cryptocurrencies are traded. Decentralized exchanges (DEXs), which operate without intermediaries, are gaining market share over centralized venues. While trading volumes may fall in 2026 along with the price of bitcoin, Cantor said he expects DEXs, especially those that trade perpetual futures, to continue growing as infrastructure and user experience improve.
Regulatory clarity is a key piece in this evolving landscape. The recent passage of the Digital Asset Market Clarity Act, or CLARITY, in the United States marks a turning point, according to the report. The law defines when a digital asset is treated as a security versus a commodity and assigns primary oversight of crypto spot markets to the Commodity Futures Trading Commission (CFTC) once decentralization thresholds are met.
Such a legal framework could reduce risk for holders and open the door for banks and asset managers to interact more directly with crypto markets. It also strengthens the legitimacy of decentralized protocols by offering avenues for compliance, which has historically been a major barrier.
Other trends Cantor highlights include the rise of on-chain prediction markets, especially in sports betting, where volumes have skyrocketed to more than $5.9 billion, more than 50% of DraftKings’ handle in the third quarter. Companies like Robinhood (HOOD), Coinbase (COIN), and Gemini (GEMI) have entered the industry, introducing fairer, order book-based alternatives to traditional sportsbooks.
Still, risks remain. The price of Bitcoin is only about 17% above the average cost basis of the Bitcoin treasury strategy. A break below that level could spook the market, even if Cantor believes the company is unlikely to sell. Meanwhile, digital asset trusts (DATs) have slowed accumulation as token prices and trust premiums compress.
Next year may not offer the next big cryptocurrency breakthrough. But the foundation for more durable infrastructure and deeper institutional adoption appears to be solidifying even as prices cool.
