TLDR
- Bitcoin’s four-year cycle is far from over, 21Shares said.
- Bitcoin peaked near $126,000 in October 2025 before falling.
- 21Shares now sees Bitcoin recovering towards $100,000 by the end of the year.
- Prediction markets recorded volume of $57.5 billion through May.
- DeFi TVL remains near $140 billion after losses of more than $840 million in 2026.
21Shares revised several of its 2026 cryptocurrency market forecasts in a mid-year update, saying the digital assets economy has continued to mature while weak prices and security failures have delayed some of the company’s previous targets.
The asset manager said its overall outlook for 2026 remains tied to the shift away from market narratives toward fundamentals, including regulated exchange-traded products, the adoption of stablecoins, tokenized assets, and new onchain applications. However, the company said the first half of the year produced a more mixed picture than expected.
Bitcoin remains central to this reassessment. 21 shares He said It had expected Bitcoin’s four-year cycle to weaken, but price action continued to resemble previous post-halving patterns after Bitcoin peaked near $126,000 in October 2025 and later entered a sharp decline.
Bitcoin cycle remains intact despite institutional ownership
Bitcoin market structure has changed, with exchange-traded funds and other investment products increasing institutional ownership, 21Shares said. The company noted that the current drawdown, at around 50%, is still more moderate than bear markets of 80% or deeper seen in previous cycles.
The report also said that bitcoin has not fallen below its total cost basis of about $54,000, suggesting that the market has so far avoided the complete capitulation seen in previous recessions. However, 21Shares said Bitcoin’s four-year cycle has not been completely broken as investors continue to weigh Bitcoin against stocks, commodities, AI-related assets and other competitive opportunities.
The company’s base case now points to the end of the year Bitcoin recovery Towards $100,000 instead of a new all-time high. The outlook reflects continued portfolio growth and institutional participation, recognizing that price trends continue to follow a familiar pattern post-halving.
Assets of exchange-traded crypto products have also exceeded previous expectations. 21Shares expected global exchange-traded cryptocurrency assets under management to exceed $400 billion, but the company said total assets reached nearly $140 billion by the end of May, down about 15% year-to-date.
ETP holdings remain near highs as stablecoins grow
Despite the decline in asset values, 21Shares said adoption of crypto investment products remains resilient. Spot the United States Bitcoin ETFs They recorded about $3 billion in net outflows this year, but their BTC holdings remain above 1.25 million BTC, near record levels.
This shows that many investors maintained their positions through volatility rather than exiting completely, the report said. New product launches have also continued after changes to SEC listing standards opened the door to more cryptocurrency products beyond Bitcoin and Ethereum.
Stablecoins were another area where growth remained strong but below the company’s previous expectations. 21Shares previously expected stablecoin supply to reach $1 trillion by the end of the year, but now expects a more realistic range of $400 billion to $600 billion.
The company said the total supply of stablecoins stood at about $320 billion at the end of May. She cited the GENIUS Act in the US and the implementation of MiCA in the EU as regulatory steps that have supported the sector, while the CLARITY Act debate on yield-yielding stablecoins has slowed part of the market’s growth trajectory.
Prediction markets lead while DeFi fails
Prediction markets are one of the few sectors that track past 21Shares forecasts. The report said markets expected to record $57.5 billion in trading volume through the end of May, putting the sector on track to exceed the company’s annual target of $100 billion.
The company said major events in the second half of the year, including the FIFA World Cup and the US midterm elections, could lift activity further. She also cited regulatory progress, platform integration, and growth in event-based trading as factors supporting the sector.
Decentralized finance has moved in the opposite direction. 21Shares predicted that the total value of DeFi would exceed $300 billion in 2026, but TVL stood near $140 billion after a year marked by losses of more than $840 million across more than 50 exploit bots.
The company said major hacks kept capital on the sidelines, including… Exploit KelpDAO And security failures related to bridges. However, she noted that select protocols with revenue and active users, including Hyperliquid and Morpho, continued to attract capital.
Digital asset treasuries also remain short of 21Shares’ target of $250 billion. Public companies hold roughly 1.28 million bitcoins, but the value of corporate crypto-treasuries is close to $100 billion at current prices. The company said that many treasury instruments are now trading at less than the value of its cryptocurrency holdings, creating conditions for consolidation.
