In search of demand: what will 2026 be like for Bitcoin and other cryptocurrencies?

For the crypto industry, 2025 was like a roller coaster ride, with impressive growth followed by an equally impressive decline. In 2026, we should not expect rapid growth in Bitcoin, warns Rustam Botashev, partner and investment director at Blockreign Fund.

It is easier, more interesting, and, most importantly, safer to make positive predictions. If an analyst makes a mistake and turns out to be overly optimistic, it happens. Such mistakes are forgiven with leniency. But if the forecast is negative, then no matter what happens, the analyst will take all the blame. That's why there are so many rosy predictions and so few realistic ones. When it comes to predicting the value of Bitcoin, it's generally "advisable not to be stingy." If you're going to talk about growth, then it should be no less than a million dollars per coin. If you're talking about a decline, then it should be at least 10 times less.

The forecast of modest growth is uninteresting and boring, but I have no other forecast for the coming year.

Almost a year ago, I formulated the main idea for the cryptocurrency market in 2025 as follows: the period was supposed to be successful not so much for Bitcoin as for other cryptocurrencies. And for most of last year, we did indeed see the market flourish—Ethereum reached an all-time high of $4,950 in August, several major projects went public, and Bloomberg listed the founders and CEOs of stablecoin issuers and several public crypto platforms among the winners in its year-end review of the crypto market.

However, optimism in the market waned toward the end of the year. Bitcoin started January 1 at $93,400 and went on to set 11 price records, reaching a peak of over $126,000 in early October. Ultimately, however, it ended the year with a decline. The last three months of 2025 were very sad for Bitcoin. After peaking in October, it easily fell below the psychologically important level of $100,000. Then, it seemed to stabilize at $90,000. But then the decline continued.

A similar pattern, only with an even greater amplitude, was observed with altcoins. The explosive growth from mid-summer to early fall was followed by a sharp decline. For example, the price of the Solana token, which jumped 90% from the end of June to the end of September, has now fallen 50% from its fall peak and is ending the year with a decline of more than 30%.

To a large extent, US President Donald Trump & Co. are responsible for such fluctuations in the market with their crypto projects, in particular the memecoin OFFICIAL TRUMP ($TRUMP). Active discussion of the formation of an American national reserve in bitcoins has also added fuel to the fire.

Expectations for the adoption of crypto-friendly legislation — the GENIUS and CLARITY Acts — were among the drivers of Bitcoin's growth. Other factors included a reduction in the key interest rate in the United States. The US Federal Reserve has lowered it three times since September. This gave a good boost to the price of Bitcoin. But it seems to have run its course.

Next year, according to the median forecast of the Federal Open Market Committee (FOMC) members, only one rate cut is expected. So, no help is to be expected from this side.

Moreover, the US, although the largest, is not the only economy supplying liquidity to the system.

The Bank of Japan, for example, has raised interest rates to their highest level in 30 years. Historically, Bitcoin has reacted negatively to such decisions. Within three to six months, the cryptocurrency fell in price with the Bank of Japan's rate hike — by 27% after the decision in March 2024, by 30% after the decision in July 2024, and by 30% after the January decision this year.

The fact that long-term holders are participating in the sale of Bitcoin is cause for concern. According to data from K33 Research cited by Bloomberg, the number of Bitcoins that have been "dormant" in wallets for more than two years has decreased by 1.6 million since 2023, with a value of approximately $140 billion. In 2025, nearly $300 billion worth of bitcoins that had been dormant for more than a year returned to circulation. CryptoQuant estimated that the latest 30-day sell-off of bitcoin by long-term holders was the largest in five years, Bloomberg wrote in December.

For most of 2025, ETFs and new institutional investors absorbed these bitcoins. But it seems that both of these sources are now "saturated." A serious trigger is needed to turn the situation around.

However, no special events are expected next year that could draw additional attention to Bitcoin and seriously affect its price. There are still more than two years until halving. There are no potential investors left who have never heard of Bitcoin. The new money needed to drive up its price can only come from traditional investors who are increasing their investments in this asset.

Thus, we return to the thesis that the rise in the price of Bitcoin is linked to the rise in stocks, mainly American ones. Traditional investors, both individual and institutional, view Bitcoin as a risky asset for diversification, allocating a small portion of their portfolios to it. It is difficult to imagine that they would do so in a falling market.

Institutional investors who bought Bitcoin in 2025 are likely disappointed. First, it failed to meet their expectations, falling 5.33% over the past year, while the S&P 500 rose 16.4%. And that's if investors got in at the beginning of the year, not at the peak of the price. From its peak, the price of the cryptocurrency has fallen by about a third.

Secondly, Bitcoin fell at the end of the year. This is precisely the time when portfolio returns are calculated and, accordingly, bonuses for managers. Having lost out on their portfolio returns and, as a result, on compensation due to Bitcoin, such investors may have become disillusioned with crypto assets. If, disappointed, they sold their Bitcoin recently, we are unlikely to see them back in this market anytime soon. The same managers who are still considering buying cryptocurrency have become much more cautious.

So, on the supply side, we have sales by long-term holders, and on the demand side, we have expectations of new investors, especially institutional ones. And they will only appear if the stock market continues to grow.

There are many professional forecasts for the traditional market. It is worth referring to them. In my unprofessional opinion, the American market is overheated, including in terms of multiples. It is trading at a price-to-earnings (P/E) ratio of around 30. A correction is needed.

But that doesn't mean we'll see the index fall in 2026. Most likely, the US market will grow by about 10%. If so, the price of Bitcoin will increase by 15%–20% in the new year. If the stock market shows a decline, the same will happen to Bitcoin, and it will fall more sharply than the traditional market — there will not be enough new investors to compensate for the supply.

The outlook for altcoins is bleaker. Until investors have had their fill of Bitcoin, they will not switch to other crypto assets. In other words, if Bitcoin prices grow slowly, other tokens will lag behind, but if they fall, they will fall faster.

This article was AI-translated and verified by a human editor