BTC's Potential 2026 Catalysts
The Daily Crypto Update for Institutional Investors
With BTC approaching the start of 2026 down 13% year-over-year, we examine possible catalysts for the asset in the coming year
A definitive break from the ‘four-year’ cycle: This week we wrote that belief in the ‘four-year cycle’ theory – which postulates that crypto has followed a boom-and-bust cycle that some attribute to BTC halvings – could be contributing to crypto’s weakness. As we noted, the theory could be causing some investors to sell their BTC in anticipation of a sharp pull-back, aligning with prior historical precedent. However, many believe that this boom-bust pattern to crypto markets has been fundamentally broken. This is due to a number of reasons, including ETF investors’ seeming continued ability to overlook BTC’s short-term volatility. In November, when BTC traded to as low as USD 80,000 Bloomberg ETF specialist Eric Balchunas pointed out, ‘Boomers hanging tough w/ 96.5% of aum sticking w/ it. I was bullish their holding ability but even I’m impressed as 30% drawdown is no joke, not to mention the media trying to scare the crap out of them.’ Holding nearly 7% of BTC’s supply, according to some commentators, ETF investors may be dampening the asset’s propensity for sharp declines. Other factors contributing to a break from the four year cycle include the growing participation of ‘long only’ investors, as BlackRock (NYSE: BLK) CEO Larry Fink recently observed.
Renewed demand from US spot ETFs: In November BTC ETFs recorded their largest monthly outflow, USD 3.53B. Having said that, the products have proven to be go-to for a new type of BTC investors participating in crypto. Examples of sovereign wealth funds investing in BTC via BlackRock’s IBIT include Mubadala, the Abu Dhabi Investment Council and Luxembourg’s Intergenerational Sovereign Wealth Fund (FSIL). Along with sovereign wealth funds, who Larry Fink described as ‘adding incrementally,’ other institutions are allocating to BTC via the ETFs, including examples such as the Harvard Endowment. Moreover, access to BTC ETFs is still in early stages despite their launch in January 2024. Vanguard, ‘the world’s second-largest asset manager,’ decided to allow access to crypto ETFs only at the start of the month. Vanguard’s decision came on the back of Morgan Stanley enabling financial advisors and clients to allocate to digital assets, and Bank of America now endorsing a 1%–4% allocation to digital assets across its Merrill, Bank of America Private Bank, and Merrill Edge platforms in response to growing client demand. These dynamics signal that demand for ETF can expand in 2026 given significant steps towards expanding accessibility in late 2025.
The ‘debasement trade:’ In October, JPMorgan (NYSE: JPM) described the increasingly popular ‘debasement trade’ among retail investors; the trade reflects growing concerns over themes such as currency debasement, political tensions, geopolitical risk, and is seen as contributing to the performance of BTC and gold.’ Considering persistent global macro anxiety, sustained geopolitical uncertainty, BTC’s ‘safe haven’ qualities are likely to continue to be attractive in 2026. Adding to this dynamic is the expected appointment of a Fed Chair by Trump who is likely to implement the President’s wishes for lower rates. Macro conditions for BTC adoption by new investors appear set to continue in 2026.
CRYPTO HEADLINES
Michael Selig and Travis Hill have been confirmed by the US Senate as chairmen of the CFTC and Federal Deposit Insurance Corp., respectively. Selig is expected to oversee potential expansion of CFTC digital asset authority, while Hill will continue easing FDIC bank capital and crypto-related requirements. - link - @Bloomberg
Intercontinental Exchange (NYSE: ICE) is negotiating an investment in MoonPay, potentially valuing the crypto payments company at USD 5B. The valuation represents a 47% increase from its previous valuation. Recent developments at the firm include MoonPay’s regulatory approvals, hiring CFTC’s Caroline Pham, and product partnerships such as launching a stablecoin with Exodus. - link - @Bloomberg
Ripple took a minority stake in TJM Investments and will support the broker-dealer’s trading and clearing operations, aiming to expand institutional digital asset services. The arrangement builds on Ripple Prime’s platform, which targets regulated institutional clients and mirrors traditional financial infrastructure, without disclosing the financial terms. - link - @Ripple
WhiteFiber (NASDAQ: WYFI) announced its subsidiary Enovum Data Centers has signed a 10-year, USD 865M colocation agreement with Nscale Global Holdings for 40 MW. WhiteFiber is the majority owned HPC unit of Bit Digital (NASDAQ: BTBT). The agreement is at WhiteFiber’s NC-1 campus in North Carolina, with potential expansion to 200 MW. Shares of WYFI are up ~20% in pre-market trading. - link - @WYFI
Bybit is re-entering the UK market after a two-year break, launching a platform with 100 spot trading pairs and peer-to-peer trading through an FCA-approved promotions arrangement with Archax. The exchange emphasizes compliance, AML, and KYC checks; derivatives and leveraged products are excluded. - link - @Cointelegraph
Coinbase (NASDAQ: COIN) has filed lawsuits in Connecticut, Illinois, and Michigan disputing state regulation of prediction markets, arguing these fall under CFTC jurisdiction. The company claims prediction markets are derivatives, not gambling, and seeks to block states’ application of gambling laws. - link - @CoinDesk
Terraform Labs’ bankruptcy administrator filed a USD 4B lawsuit against Jump Trading and its executives. The lawsuit alleges Jump Trading profited from a backdoor deal tied to the Terra (LUNA) and TerraUSD (UST) 2022 collapse. Jump denies wrongdoing. The SEC previously fined Jump’s unit USD 123M. Last week, Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison by a US judge for fraud related to the project’s collapse. - link - @WSJ
TOP ARTICLES
OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
Bitcoin Accumulators Are Singing a New Song as Strategy Sours, Bloomberg, December 18, 2025
Bloomberg covers dynamics in the BTC treasury space.
CRYPTO MULTIMEDIA
Inside Robinhood’s Big Super App Plan: ‘There’s Still a Lot of Work to Be Done’, Unchained, December 18, 2025
Robinhood Crypto Senior Vice President and General Manager Johann Kerbrat discuss the firm’s crypto ambitions.
CHART OF THE DAY
The BTC hash rate has seen a decline along with the asset’s price.
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FRNT is a digital asset investment bank offering capital markets and advisory services to institutional investors participating in or entering the space. The Company aims to bridge the worlds of traditional and web-based finances with a technology forward and compliant operation. Business lines include deliverable trading services, structured derivative products, merchant banking, advisory, consulting, lending origination and principal investments. Headquartered in Toronto, FRNT was co-founded in 2018 by CEO Stéphane Ouellette.