Bitcoin’s Heading into 2026, prices will continue to reflect a complex mix of macro trends and specific market events.
Jim Ferraioli, director of cryptocurrency research and strategy at the Schwab Center for Financial Research, said Bitcoin is affected by three long-term forces and seven short-term forces.
The long-term factors are global M2 money supply, deflationary supply growth of Bitcoin, and adoption. Short-term drivers include market risk sentiment, interest rates, a stronger dollar, seasonality, excess central bank liquidity, the supply of large Bitcoin wallets, and financial contagion.
As 2026 begins, some of these short-term variables appear to be working in Bitcoin’s favor. Ferraioli noted that credit spreads remain tight and the market has sold off many speculative derivatives positions that fueled the sharp sell-off in late 2025.
“The risk environment for equities should be favorable for cryptocurrencies – the ultimate risk asset,” he said.
Monetary policy may also play a role. “We believe interest rates and the dollar will continue to move lower this year,” he added. “Liquidity has been supportive as quantitative tightening ends and balance sheet expansion begins again.”
Still, resistance remains. While Ferraioli believes there could be a turnaround if regulatory clarity improves, adoption is likely to slow in the first half of the year, especially after the volatility in late 2025. “Passage of the CLARITY Act could accelerate adoption by real institutional investors,” he said.
There is also the halving cycle to consider. “Historically, the third year of the halving cycle is a bad year. Since there are many cryptocurrency investors following the cycle theory, this may put pressure on prices,” he believes.
Bitcoin has typically risen about 70% each year since 2017 from its annual lows, although this measure was taken to smooth out volatility. Ferraioli said that while 2026 is expected to be a positive year, returns are likely to be well below historical averages.
He also noted that Bitcoin’s trend relative to traditional assets could shift. He expects cryptocurrencies to have lower correlations with other asset classes and macro factors. “It remains highly correlated with large-cap AI stocks, but its correlation with broader equity indexes has been declining,” Ferraoli said. explain.
