Three structural factors that will influence the Bitcoin market in 2026

In early 2026, Bitcoin price trends are being influenced by multiple structural factors in a complex manner. Currently, BTC is trading around $88,100, and its movement since the beginning of the year has attracted market participants’ attention. According to the latest analysis by NYDIG Research and market maker Wintermute, the dominant forces governing the crypto asset market are shifting from the traditional “halving cycle” to a “fundamental transformation of market structure.” This change not only affects price fluctuations but also has the potential to alter the very mechanisms of investor capital allocation.

A New Market Reality: The Relationship Between Economic Instability and Bitcoin

Analyzing recent support factors for Bitcoin’s price reveals that geopolitical risks and U.S. economic instability are coming to the forefront. Greg Cipolaro of NYDIG Research points out that ongoing tensions between Donald Trump and Federal Reserve Chair Jerome Powell are fostering market uncertainty.

It has been reported that Trump criticizes Powell for not responding to his policy demands, and political pressure on the Federal Reserve is increasing. This situation resembles the interference by President Richard Nixon with the Federal Reserve before the 1972 election. As Cipolaro notes, “Political intervention in monetary policy has historically almost invariably led to negative consequences, including high inflation, declining trust in central banks, and currency weakening.”

Such economic instability is also linked to worsening employment markets and increasing layoffs. In this economic environment, Bitcoin, as a non-sovereign asset with a fixed supply, tends to be re-recognized as a store of value. In fact, while traditional safe-haven assets like gold and silver surged to record highs amid the world’s money supply reaching unprecedented levels, the market psychology that previously kept BTC, known as “digital gold,” from following suit is now reversing.

As Cipolaro emphasizes, “Truly non-sovereign stores of value are extremely rare on a global scale,” which is driving the maturation of the crypto asset market. Additionally, the end of tax-loss selling overhang at the start of the year and the completion of adjustments to unhedged long positions remaining after October’s settlement are acting as price support factors.

Transformation of Market Mechanisms Through Institutional Investor Products

Historically, the crypto asset market has been driven by a four-year cycle centered around Bitcoin’s halving events. The rapid price surges after halving have triggered altcoin rallies, followed by a bear market, shaping the behavior patterns of market participants.

However, this dynamic is fundamentally changing. According to Wintermute’s analysis, “the four-year cycle may have already ended.” The fact that 2025 did not bring a rally based on cycle expectations is a symbolic proof of this.

At the core of this structural shift is the rapid expansion of institutional investor products such as exchange-traded funds (ETFs) and digital asset trusts (DAT). These products provide ongoing demand for large assets but also serve as a limited capital allocation mechanism, which Wintermute describes as a “walled garden.”

As a result, the traditional “capital rotation” mechanism is no longer functioning. The classic pattern of crypto-native wealth flowing from Bitcoin to Ethereum, then to blue-chip altcoins, and finally to more speculative tokens no longer exists.

Data clearly shows this. The altcoin rally period in 2025 shrank to an average of just 20 days, a significant reduction from over 60 days in 2024. A few large assets absorb most of the new capital, while the majority of the market struggles to maintain momentum. Furthermore, retail investor interest continues to be dispersed across AI stocks, rare earth-related stocks, and quantum computing companies, rather than concentrated in the entire crypto market.

Potential Capital Inflows: Three Scenarios

In the current market environment, there are three main catalysts that could promote an upward movement in the crypto asset market.

The first catalyst is the expansion of asset allocation strategies by institutional investors. Players such as ETFs and treasury companies are increasingly incorporating a broader range of digital assets. Currently, spot markets are trading ETFs related to SOL and XRP, and applications for other altcoin ETFs are under review. If this trend progresses, a shift from “concentration in large assets” to “broad market participation” is expected.

The second catalyst is secondary capital inflows driven by wealth effects. A strong rally in BTC or ETH could generate paper profits for investors, leading to increased investment in the broader altcoin market. If this scenario materializes, overall market liquidity could improve significantly.

The third catalyst is capital movement from stock markets by individual investors. Repatriation funds from equities, new inflows of stablecoins, and a recovery in risk appetite could bring new energy to the crypto market.

As Wintermute points out, “Ultimately, how much capital re-enters digital assets remains uncertain.” The outcome will depend on whether any of these catalysts can “significantly expand liquidity beyond a few major assets or if the concentration persists.”

Accompanying Market Trends: XRP and the NFT Market

Despite XRP recording a decline of about 4% this month, on-chain indicators suggest that investor interest remains strong. In fact, U.S.-listed spot XRP ETFs recorded a net inflow of $91.72 million this month, contrasting with the continued outflow trend from Bitcoin ETFs. This subtly indicates that institutional interest in altcoins is selectively increasing.

Meanwhile, projects like Pudgy Penguins are evolving from speculative “digital luxury goods” to multi-faceted consumer IP platforms, symbolizing the maturation of the Web3 market. These projects are expanding user acquisition through mainstream channels via toys and retail partnerships, while also developing Web3 onboarding through gaming, NFTs, and PENGU tokens. As a result, they are building ecosystems spanning physical-digital products (retail sales exceeding $13 million, over 1 million units sold), gaming experiences (Pudgy Party with over 500,000 downloads in two weeks), and widely distributed tokens (airdrops to over 6 million wallets).

The Bitcoin market in 2026 and the broader crypto asset market are shifting from traditional cyclicality to a fundamental transformation of market structure. The expansion of institutional investor products, changes in capital allocation mechanisms, and fluctuations in individual investor behavior will be key factors shaping future price trends.