Crypto's Current Slump: Why Experts Still See Potential

A Tough Year for Bitcoin and Ethereum

The crypto world is currently experiencing a challenging period. Both Bitcoin and Ethereum are on track for their first down year since 2022. However, experts suggest that this downturn might just be a temporary setback.

Market Pressures and Expert Predictions

The market is under significant pressure due to fears surrounding Bitcoin's four-year cycle and a less-than-optimistic economic outlook. This has led to a drop in prices. Experts warn that the downturn might worsen before it improves.

Silver Linings: Growth Areas in Crypto

Despite the challenges, there are several promising developments in the crypto space:

Stablecoins

• Growth: Stablecoins, which are cryptocurrencies tied to stable assets like the US dollar, saw a remarkable growth of over 50% in 2025.
• Future Outlook: Experts predict that this growth will slow down in 2026 but will not reverse.

Tokenized Real-World Assets

• Market Growth: The market for tokenized real-world assets, such as real estate and art, expanded from $5.9 billion to $18.5 billion in 2025.
• Future Projections: This market is expected to reach $50 billion in 2026.

Prediction Markets

• Drivers: Sports betting is a major driver of growth in prediction markets, where people bet on the outcomes of future events.
• Volume Growth: Volumes in these markets have nearly tripled year over year.

Ethereum's Ecosystem

• Activity: Ethereum's ecosystem remains active, supporting its value.
• Key Areas: Ethereum is a significant player in stablecoins, tokenization, and layer-2 networks.
• Positive Signs: Rising on-chain activity is seen as a good indicator.

Record-Breaking Mergers and Acquisitions

• 2025 Figures: Global crypto mergers and acquisitions hit a record $8.6 billion in 2025, up from $2.17 billion in 2024.
• Drivers: This surge is attributed to a more pro-crypto regulatory stance and increasing policy clarity.

Regulatory Clarity and Institutional Participation

• Legislation: Experts expect the Digital Asset Market Clarity Act to pass in 2026, which could clarify what constitutes a security versus a commodity.
• Impact: This clarity could reduce uncertainty and accelerate institutional participation.

Digital Asset Treasury Accumulation

• Slowdown: Experts predict a significant slowdown in digital asset treasury accumulation in 2026.
• Reasons: Valuation premiums are compressing, and sentiment is cautious.
• Strategic Shifts: Instead of aggressive token accumulation, digital asset treasuries are likely to focus on buybacks, mergers and acquisitions, and strategic ecosystem investments.