2026 Outlook: These six structural forces are paving the way for the next cycle

*Original Title: *Road to 2026: 6 Trends Shaping Crypto

Original author: 0xJeff, AI Investor

Original text compiled by: Dingdang, Odaily Planet Daily

The year 2025 will be a challenging year for the crypto industry—despite the current U.S. president's promise to make the U.S. a global center for crypto and AI, this year's crypto market remains very tough.

Since Trump officially took office in January, the market has repeatedly experienced moments of pressure, the most deadly of which was the flash crash event in October — that plunge almost paralyzed the entire cryptocurrency industry.

Although the chain reaction of this flash crash has not been fully resolved to date, the macro background and favorable industry factors are indicating a more positive quarter and a more positive outlook for 2026.

This article will delve into 6 trends that are reshaping the cryptocurrency industry behind the scenes, providing you with an early glimpse of what the landscape might look like in 2026. Let's get started.

1. Prediction market = Crypto version options product finds PMF

The prediction market (PM) has recently made breakthroughs at the industry level, with its weekly nominal trading volume reaching a new historical high of 3 billion USD two weeks ago.

We see the market types rapidly expanding - politics, sports, e-sports, pop culture, mention-based markets, macroeconomics, cryptocurrency, finance, financial reports, technology, and so on, flourishing in all aspects.

@Polymarket and @Kalshi are developing in the direction of “everything is predictable”, covering all popular topics; while emerging PM projects like @trylimitless and @opinionlabsxyz are digging deep into vertical niches—Opinion focuses on pure macro markets, providing predictions for economic indicators such as interest rates in the US, EU, and Japan; Limitless focuses on crypto assets, offering a wider range of coins and richer time frames for the market.

Crypto options were all the rage during the bull market of 2021, but subsequently declined due to multiple issues, among which the most critical were poor UI/UX and a lack of liquidity.

The prediction market perfectly fills the gap left by options. It offers an extremely user-friendly interface that allows people with no financial knowledge to bet on any event; at the same time, it attracts users to participate by creating interesting markets, allowing anyone to get involved and become a market maker and trader (betting on both “yes” and “no”). Instead of understanding a bunch of Greek letters and complex terminology, you only need to buy Yes or No shares.

Similar to options, users can also hedge their asset exposure using prediction markets.

For example:

· You received a large airdrop but want to hedge in advance? Go buy No in that market.

· Is your investment portfolio too long? Go macro or buy No in the BTC market.

You know.

Prediction markets essentially repackage options into a more mainstream product that everyone can participate in and profit from, and one of the biggest beneficiaries in this process is the machine learning/prediction teams.

2. Prediction Market = The Perfect Testing Ground for Machine Learning Teams

More and more teams are increasing their investments in prediction markets, refining their signals and models, such as: @sportstensor, @SynthdataCo, @sire_agent, @AskBillyBets, etc.

Sportstensor is the liquidity provider layer of Polymarket, where any PM trader can participate in signal competitions. The best-performing signals can earn Alpha token incentives, and these signals will also feedback into Sportstensor to further enhance its prediction models for future profitability.

Synth follows the high-frequency hedge fund approach of prediction markets, using its own signals to forecast the prices of crypto assets for 1 hour and 24 hours, and placing bets in the prediction markets. Preliminary results show - growing from 3000 dollars to 15000 dollars in one month, with a return of 500%.

Sire is building an Alpha Vault, utilizing Sire's model and SN44 Score data for sports predictions, with current preliminary results exceeding 600% PnL. It is the best prediction market DeFi vault product currently prepared for public release.

Billy provides analysis and automated betting tools, leveraging the team's sports betting insights (BCS). They are looking for their own advantages in Kalshi's parlay market and plan to expand their strategy and treasury size (future earnings will be distributed to token holders after the treasury size reaches a threshold).

The charm of prediction markets lies in their natural breeding of multiple scenarios similar to “Darwinian AI competitions,” where ML teams can prove their strategies in real market environments.

Synth, Sire, and Billy can all participate in the Sportstensor competition, and soon they will also be able to join the War of Markets planned by @aion5100 and @futuredotfun on Polymarket and Kalshi.

What's cooler is that Polymarket is about to launch the Poly token, and the new PM projects are also attracting liquidity and trading volume through token incentives. The machine learning team can find price discrepancies and arbitrage while also taking advantage of token incentives.

Does it remind you of the early days of Hyperliquid?

The same thing happened again, but this time it occurred in the prediction market, rather than in perpetual contracts.

3. Neobank War Begins

We are seeing key changes: large Web2 startups and enterprises are launching L1/L2 and integrating stablecoin payment links to directly serve users. At the same time, crypto-native projects are also advancing towards real-world financial services.

Teams like @ether_fi, @useTria, @AviciMoney, and @UR_global now offer non-custodial crypto debit cards, allowing users to spend their on-chain assets in the real world.

In just one year, this market has transformed from a blue ocean to a crowded battleground, with 20-30 heavyweight players competing for the same batch of crypto users.

The current differentiation mainly focuses on:

· Cashback / Rebate Rate: Tria has the highest cashback, but an annual fee is required.

· Exchange rates, transfer, ATM fees

· Benefits System (Travel, Hotel Levels, Airport Lounges, Activities)

· Earn / DeFi Integration (Idle Fund Earnings, Lending and Consumption): EtherFi is leading in this direction, providing high yields + lending and consumption capabilities.

Nevertheless, most products have the same underlying structure. They rely on partner banks/issuers holding Visa/Mastercard licenses, making them more like “user acquisition gateways” rather than true Neobanks.

Therefore:

· Compliance is managed by the cooperating bank, rather than the project itself.

· The user's balance is only a virtual account, not a real bank account.

· Functions usually stop at “crypto spending”, lacking a complete fiat off-ramp or banking services.

Currently, everyone is affected by these restrictions, so the impact is not significant. However, as competition intensifies, whoever can become the “real bank” will have a core advantage. Projects that can control their own compliance and regulatory systems will be able to provide real bank accounts, multi-currency deposit and withdrawal channels, and achieve seamless integration between crypto and traditional finance.

In this regard, UR (from the Mantle ecosystem) is a step ahead, currently operating under FINMA regulation, holding Swiss banking permissions, supporting seven fiat currencies, and simultaneously supporting both real-world and crypto financial services (such as transfers in seven different currencies within the traditional banking system).

4. The breakthrough applications in the crypto industry are clearer than ever.

· Trade

· Prediction

· DeFi Yield

· Stablecoin

· Asset Tokenization

We have come from CEX → spot DEX → perpetual DEX, all the way to the era of Hyperliquid.

The “super speculative Launchpad” wave led by Pumpdotfun has triggered the rise of numerous narrative-driven on-chain launch platforms.

The prediction market is developing rapidly, truly reaching mainstream users for the first time (we have never seen such viral spread since the NFT era, and this time people really like the product).

DeFi has fully entered Wall Street in areas such as structured returns, interest products, stablecoins, RWA/DePIN, and asset tokenization. People realize they can “own a piece of the future” and earn returns on it (even using it as collateral to borrow money).

All key crypto applications are being further amplified: CEX is launching wallet super apps, such as Base App, Binance, OKX, etc., while other wallets are rapidly expanding their capabilities to make it easier for ordinary users to get started.

ICO is making a comeback - Coinbase has launched the first Monad ICO, and other platforms (Legion, Kaito) are also growing rapidly.

5. Crypto AI found PMF

Crypto AI was initially dominated by a bunch of AI Meme coins and GPT shell projects that called themselves “AI Agents,” but now these noises have retreated.

Nowadays, blockchain payments and stablecoins are supporting automated transactions between agents; cryptographic technologies such as TEE and ZK, combined with token incentives and punishment mechanisms, make AI systems verifiable, controllable, and predictable.

The support layer (such as x402, ERC-8004, programmable wallets, billing frameworks, verifiable reasoning/computation) is laying the foundation for “seamless collaboration between AI and humans” (the infrastructure enables AI and humans to transact and collaborate seamlessly anytime and anywhere, and provides protective mechanisms to prevent AI from going out of control).

At the same time, “Darwinian AI” has emerged as a meta-layer competition, driving agent evolution, optimizing signals, and enhancing performance through real incentives. The most successful use case so far remains trading and predictive signals, which are highly compatible with the genetics of the cryptocurrency industry.

More and more ecosystems are adopting this Darwinian model, using tokens to incentivize developers, reward contributors, and subsidize R&D, driving higher quality AI products. Although still in the early stages, some subnetworks of the Bittensor ecosystem have already shown impressive performance.

Nevertheless, the tokens of most Crypto AI projects have not reflected these advancements synchronously—many projects are still 30–90% lower than their TGE prices, even though they are delivering real infrastructure and practical utility.

6. DeFi enters the “Dynamic DeFi” era

DeFi has long been a core pillar of the crypto industry, with a TVL exceeding $130 billion, covering DEX, lending, yield products, and stablecoins.

The advantages of DeFi lie in its programmability, verifiability, and high composability, with top protocols being the most robust systems in the industry. However, over the past five years, the underlying mechanisms of DeFi have remained largely unchanged, with centralized liquidity market making or lending mechanisms being relatively static.

But now imagine this: what if a new DeFi protocol could automatically leverage/de-leverage based on the predicted price of the underlying asset, automatically rebalance LP positions, and automatically enter and exit the market?

This is the beginning of the “Dynamic DeFi Era,” driven by AI and machine learning.

Machine Learning Enhanced DeFi

@AlloraNetwork is a key player, collaborating with top protocols to inject machine learning intelligence into traditional DeFi:

· Machine Learning Driven Centralized LP Strategy

· Dynamic Leverage Management

· Revenue optimization based on forward-looking risk signals

These predictions and signals are generated by the Allora inference network, where AI/ML engineers can contribute models and receive token rewards through a Darwinian incentive mechanism, which rewards models that perform better.

AI-Generated and AI-Managed DeFi Strategies

@gizatechxyz and @almanak are also promoting a new type of product:

· Giza is an AI asset manager that intelligently allocates funds across various DeFi protocols.

· Almanak allows AI agents to deploy tokenized strategy Vaults within minutes, making it both a capital allocator and a strategy creation platform. This enables Almanak to serve as both a capital allocator (bringing TVL into DeFi projects) and a treasury creation platform for fund managers.

With the deeper integration of TradFi and DeFi, machine learning enhances the core values and risk management of DeFi, and AI designs more complex strategies. We may see a faster expansion of DeFi by 2026, as a more intelligent, autonomous, and adaptable layer of internet finance is emerging.

What's next?

In 2026, we may see the convergence of multiple narratives - Crypto, AI, DeFi, RWA, DePIN, robotics, etc. are coming together to form an interoperable digital economy operated jointly by humans and agents.

· DeFi becomes dynamic

· AI drives DeFi to expand to more users

· Encrypted payment links, stablecoins, and key applications gain larger scale users

· Neobank integrates Web2 and Web3

· The predicted market size continues to grow, and the machine learning team has become a core component.

Natural selection accelerates, and only a few assets can truly appreciate.

Cryptocurrency projects are more likely to choose IPOs rather than ICOs to obtain liquidity, compliance, and scale through traditional capital markets.

The next round cycle = the deep integration cycle of TradFi and DeFi.

Source: Planet Daily