Bitcoin could be heading into a longer downturn, according to Cantor Fitzgerald, but it will likely be a prelude to the crypto industry entering a more stable, institutionally driven phase.
Markets are likely in the early stages 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 from its peak, and Knoblauch suggests that prices could remain under pressure for several months, possibly even testing the Strategy’s (MSTR) average breakeven price near $75,000.
Unlike previous recessions, 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 actually happening under the hood, particularly in decentralized finance (DeFi), tokenized assets and crypto infrastructure.
Take real-world asset (RWA) tokenization. According to the report, the value of tokenized RWAs on the chain – 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, with the pace accelerating as more financial institutions experiment with onchain settlement.
The shift also plays out in how crypto is traded. Decentralized exchanges (DEXs), which operate without intermediaries, gain market share from centralized venues. While trading volume may decline in 2026 along with bitcoin’s price, Cantor said it expects DEXs, particularly those trading perpetual futures, to continue to grow 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 US marks a turning point, the report says. The law defines when a digital asset is treated as a value relative to a commodity, and assigns primary oversight of spot crypto markets to the Commodity Futures Trading Commission (CFTC) once decentralization thresholds are met.
The legal framework could reduce headline risk and open the door for banks and asset managers to engage more directly with crypto markets. It also strengthens the legitimacy of decentralized protocols by providing compliance pathways, which have historically been a major barrier.
Other trends highlighted by Cantor include the rise of onchain prediction markets, particularly in sports betting, where volume has risen to over $5.9 billion, more than 50% of DraftKings’ handle in the third quarter. Firms such as Robinhood (HOOD), Coinbase (COIN) and Gemini (GEMI) have entered the industry, introducing fairer, orderbook-driven alternatives to traditional sportsbooks.
There are still risks. Bitcoin’s price is only about 17% above the average cost basis of bitcoin tax firm Strategy. A break below this level could spook the market, although Cantor believes the firm is unlikely to sell. Meanwhile, digital asset trusts (DATs) have slowed accumulation as token prices and trust premiums compress.
The coming year may not hold crypto’s next big breakout. But the foundations for more durable infrastructure and deeper institutional adoption appear to be solidifying even as prices have cooled.
