Crypto winter looms in 2026, but Cantor sees institutional growth and onchain shifts

Core Insights - Bitcoin (BTC) is likely entering a prolonged downturn, which may lead to a more stable, institutionally driven phase in the crypto industry [1] - The market is in the early phase of a crypto winter, with Bitcoin approximately 85 days past its peak, and prices may remain under pressure for months, potentially testing an average breakeven price near $75,000 [2] - Unlike previous downturns, this phase may not be characterized by mass liquidations or structural failures, as institutional participants are now shaping the market [3] Tokenization and Market Trends - The value of tokenized real-world assets (RWAs) has tripled to $18.5 billion over the year, with projections suggesting it could exceed $50 billion by 2026 as more financial institutions engage in onchain settlement [4] - Decentralized exchanges (DEXs) are gaining market share from centralized venues, and while trading volumes may decline in 2026, DEXs, particularly those trading perpetual futures, are expected to continue growing [5] Regulatory Developments - The passage of the Digital Asset Market Clarity Act (CLARITY) in the U.S. marks a significant turning point, defining digital assets as securities or commodities and assigning oversight of spot crypto markets to the Commodity Futures Trading Commission (CFTC) [6] - This legal framework could reduce headline risk and facilitate greater engagement from banks and asset managers in crypto markets, while also enhancing the legitimacy of decentralized protocols by providing compliance pathways [7] Emerging Trends - Onchain prediction markets, particularly in sports betting, have seen volumes exceed $5.9 billion, representing over 50% of DraftKings' handle in Q3, with companies like Robinhood, Coinbase, and Gemini entering the space [8]