Bitcoin Cantor Fitzgerald said that the cryptocurrency industry may be in for a long-term downturn, but this may be a prelude to a more stable, institutional-driven phase for the crypto industry.
According to a year-end report from analyst Brett Knoblauch, the market may be in the early stages of a cryptocurrency winter, echoing the four-year cycle in Bitcoin’s history. Bitcoin is roughly 85 days removed from its peak, and Knoblauch said the price could remain under pressure for months, possibly even testing the Strategy (MSTR) average breakeven price of close to $75,000.
However, unlike past recessions, this one may not be defined by a massive liquidation or structural failure. Knoblauch said it is institutional players, rather than retail traders, that are now shaping the contours of the market, and he has seen a widening gap between token price performance and what is actually happening behind the scenes, particularly in decentralized finance (DeFi), tokenized assets and crypto infrastructure.
Take the tokenization of real world assets (RWA) as an example. According to the report, the value of on-chain tokenized RWA (assets such as credit products, U.S. Treasuries and stocks) has tripled in one year to $18.5 billion. Cantor said that this number could exceed $50 billion by 2026 as more financial institutions experiment with on-chain settlement.
This shift is also reflected in the way cryptocurrencies are traded. Decentralized exchanges (DEX), which operate without intermediaries, are taking market share from centralized venues. While trading volumes are likely to decline in 2026 as Bitcoin prices fall, Cantor said he expects decentralized exchanges, especially perpetual futures trading, to continue to grow as infrastructure and user experience improve.
Regulatory clarity is a critical part of this evolving landscape. The report states that the recently passed Digital Asset Market Clarity Act (CLARITY) in the United States marks a turning point. The law defines when digital assets are considered securities rather than commodities and assigns primary regulatory authority over the spot cryptocurrency market to the Commodity Futures Trading Commission (CFTC) once a decentralization threshold is reached.
This legal framework could reduce overall risk and open the door for banks and asset managers to participate more directly in the crypto market. It also strengthens the legitimacy of decentralized protocols by providing a path to compliance, which has historically been a major obstacle.
Other trends highlighted by Cantor include the rise of on-chain prediction markets, particularly in the sports betting space, where transaction volume has surged to more than $5.9 billion, accounting for more than 50% of DraftKings’ total volume in the third quarter. Companies such as Robinhood (HOOD), Coinbase (COIN), and Gemini (GEMI) have entered the industry with fairer, order book-driven alternatives to traditional sports betting.
Still, risks remain. Bitcoin’s price is only about 17% higher than Bitcoin finance firm Strategy’s average cost basis. Even if Cantor thinks the company is unlikely to sell, a drop below that level could unsettle the market. Meanwhile, digital asset trust (DAT) accumulation has slowed as token prices and trust premiums have compressed.
The next big breakout for cryptocurrencies may not come in the coming year. But even as prices cool, the foundation for more durable infrastructure and deeper institutional adoption appears to be solidifying.