Wall Street's major investment banks have recently been bullish on the US stock market's performance in 2026, generally predicting double-digit gains. Although valuations are currently somewhat high, AI-driven profit growth is expected to continue supporting stock prices, which is an indirect positive for the crypto market.

What does the strength of the stock market reflect? Mainly an increased risk appetite and abundant market liquidity. As a high-risk asset, cryptocurrencies will benefit from this, but there is a caveat—BTC's correlation with US stocks is clearly strengthening. In other words, if the stock market crashes sharply, BTC will find it hard to remain unaffected and will likely decline as well.

Interestingly, the gains in the US stock market in 2025 are mainly concentrated in the seven tech giants, but by 2026, there may be rotation, with capital flowing into small and mid-cap companies. This logic is very similar to the crypto market's rotation from BTC to altcoins—when mainstream assets stop rising, money will seek new targets.

AI is undoubtedly the biggest theme in 2026. Giants like Nvidia, Microsoft, and Google are still increasing their capital expenditure, and AI infrastructure development is driving the entire industry chain. But risks are also present—if AI applications underperform expectations, the current bubble could burst.

The crypto industry is also not idle, embracing the AI wave. AI tokens performed well in 2024-2025, with hot sectors including decentralized computing, AI model training, and data marketplaces. However, most projects are still in the conceptual stage, with few actually implemented.

Regarding investment strategies, instead of choosing between the stock market or the crypto market, it’s better to pursue both. The stock market can provide relatively stable returns, while the crypto market offers high flexibility. A recommended allocation is 60% stocks and 40% crypto. Focus on tech stocks and AI-related assets in the stock portfolio, and on BTC, ETH, and AI concept coins in the crypto portfolio.

Risk control is always the top priority. If the Nasdaq drops below 15,000 points, start reducing crypto holdings because the correlation between the two is too high. Conversely, if the Nasdaq can break through 17,000 points, consider increasing crypto positions to follow the rise in risk appetite.

In the current environment, the probability of a simultaneous decline in stocks and bonds is not high. The cycle of rate cuts will likely provide some market support. But be alert to black swan events—geopolitical conflicts, economic recessions, and policy missteps—any of which could trigger chain reactions.