Coinbase says three areas will dominate the crypto market in 2026

Core Insights - Crypto markets are entering a phase where activity concentration is more significant than narrative momentum, with 2026 being a critical year for testing the scalability of core markets under disciplined conditions [1] Market Dynamics - Familiar crypto cycle models based on retail speculation and token launches are becoming less reliable as institutional participation and market plumbing increasingly influence price behavior [2] - Perpetual futures are identified as a central pillar of crypto market activity, with derivatives now accounting for the majority of trading volume across major venues, shifting price formation mechanics towards positioning, funding rates, and liquidity conditions [3] - Following liquidation events in late 2025, leverage was sharply reduced in derivatives markets, characterized as a structural reset that removed speculative excess while maintaining resilient participation in perpetual futures [4] - Tighter margin practices and improved risk controls are contributing to markets that can absorb shocks more efficiently, even as derivatives continue to dominate liquidity [5] Prediction Markets - Prediction markets are evolving from experimental products into more durable financial infrastructure, with rising notional volumes and deeper liquidity indicating their increasing use for information discovery and risk transfer [6] - Fragmentation across prediction platforms is driving demand for aggregation and improved efficiency, attracting more sophisticated participants and expanding usage beyond crypto-native traders, especially as regulatory clarity improves in certain jurisdictions [7] Real-World Applications - Stablecoins and payments are highlighted as the most persistent source of real-world usage in crypto, with transaction volumes growing through settlement, cross-border transfers, and liquidity management rather than speculative trading [8]