Some friends asked me to share my outlook on the trends for 2026. The more specific the prediction, the less accurate it tends to be. We can sense the general direction, but the exact evolution is known only to the "director." What follows is not really a prediction but a focus on several key aspects of future crypto trends:

1. Deepening Institutional Involvement

By 2026, institutional participation in the crypto space will further increase, mainly driven by clearer regulatory frameworks. Institutional involvement not only means allowing their clients to buy BTC/ETH but also promoting asset tokenization, and utilizing tokenized assets for on-chain activities such as staking, spot trading, lending, and derivatives. Especially for DAT companies, they will no longer be satisfied with just BTC/ETH exposure or staking yields but will actively participate in the crypto economy.

These activities will benefit DeFi, on-chain gas consumption, and the onboarding of off-chain users. Ethereum and other Layer 1 chains, along with DeFi infrastructure, will directly benefit.

2. Growing Privacy Demands

As institutional involvement increases, privacy needs will also grow, leading to further development of ZK technology (Zero-Knowledge Proofs) and FHE (Fully Homomorphic Encryption). This will favor privacy projects, as it creates more practical demand. 2026 is expected to be a golden year for Ethereum privacy development, with confidential transactions and compliance implementations pushing Ethereum to carry at least double the current assets and larger transaction volumes.

3. AI Agent Economy

The AI agent economy will expand more than fivefold, with protocols like x402 promoting on-chain micro-payments, which in turn will drive transactions between AI agents. Coupled with ERC4008/AP2 and other protocols, this could lead to significant growth in on-chain economic activity. Projects like Virtuals ecosystem are well-positioned, and other x402-related projects will also benefit.

4. Outperforming General L2 Chains

Currently, aside from lighter and Worldcoin, Polymarket is developing its own L2 application chain. In the future, more high-frequency trading L2 application chains will emerge. This is positive for Ethereum, potentially increasing security demands and gas consumption. However, a persistent challenge remains: how to integrate fragmented L2 liquidity and how to ensure ETH captures value during L2 growth. This will be a crucial part of Ethereum’s positive feedback loop.

5. Perpetual Contracts for Tokenized Stocks

Perpetual contracts are among the most successful applications in crypto today. With the tokenization of US stocks, perpetual contracts based on US stocks will follow, bringing larger on-chain capital flows. Since stock perps are not limited by region or time, they will attract not only existing crypto players but also off-chain participants. If user experience improves, this market could surpass the current crypto perp market in size. This is positive for existing players like lighter, Hyperliquid, and Aster, but if stock perps grow significantly, new heavyweight players are likely to emerge.

6. Prediction Markets

Prediction markets will be one of the most watched markets in 2026. The World Cup will further bring off-chain users on-chain (even if users are unaware that funds and operations are on-chain, that’s not important). Trading volume on platforms like Polymarket, Opinion, Kalshi could see substantial growth. The landscape of prediction markets is still evolving, similar to the early days of DEXes and perp markets. Mastering user engagement, user experience, liquidity, oracles, and compliance will be decisive.

Introducing short-term predictions and leverage into prediction markets will increase their risk profile. As liquidity deepens, regulatory intervention becomes more likely. Additionally, with the emergence of more long-tail prediction markets, a truly user-friendly prediction market aggregator will become very important. Good user experience and distribution capabilities could lead to the rise of a unicorn-like project. Many projects are likely already in development.

7. Stablecoins and Payments

This is a core focus of future asset tokenization trends. Currently, stablecoins have a total market cap exceeding $300 billion, with potential to surpass $600 billion by 2026. Stablecoins are increasingly used in cross-border remittances and payments, especially among migrant workers and users in high-inflation countries (Middle East, Africa, South America).

The combination of stablecoins with traditional payment systems will make stablecoins more important in real-world payments, greatly expanding the US dollar’s influence. As other countries recognize the power of stablecoins, they will also develop non-USD stablecoins.

8. Birth of Staking Media

Staking media will begin to enter the public eye. Although still in early stages, projects that attract market interest will emerge.

9. Deformation of the Four-Year Cycle

The traditional four-year cycle in crypto is no longer the same. While cycles still exist, they no longer follow the classic Bitcoin halving pattern. The situation next year is likely to differ significantly from previous bull-bear cycles.

In summary, crypto narratives have not disappeared entirely but will focus on a few key themes, with no more all-encompassing boom. The most important keywords for 2026 are: asset tokenization, crypto AI economy, and stablecoin payments. Other hot topics include the revival of DeFi (perps, options, lending, DEX), prediction markets, and privacy.