Three Market Turning Points That Will Drive the Next Cryptocurrency in 2026

Bitcoin has risen approximately 1.16% year-to-date, trading at $88,280. This is primarily due to political instability in the United States and structural changes in the crypto market. The once four-year cycle has come to an end, and a new market mechanism is beginning to drive the rise of the next wave of cryptocurrencies.

Bitcoin Correction, Political Risks and Structural Shift in the Background

Bitcoin surged from about $93,300 in January last year to a temporary high of $97,000, but is now correcting to $88,280. The 24-hour volatility is -0.83%, and over the past 7 days, it’s -1.85%, indicating continued short-term weakness. Several market factors are intertwined behind the modest 1.16% increase since the start of the year.

According to Greg Cipollaro of NYDIG Research, the short-term support for prices is political instability in the U.S. Tensions between former President Donald Trump and Federal Reserve Chair Jerome Powell are influencing market sentiment. Political pressure on Powell’s rate cut decisions is similar to President Richard Nixon’s interference with the Fed in 1972, and Cipollaro points out, “Political interference in monetary policy invariably has negative effects. Typical side effects include high inflation, declining central bank credibility, and currency weakening.”

Bitcoin, as a non-sovereign asset with a fixed supply, tends to benefit from investor concerns about these risks. However, at the same time, with the global money supply reaching record highs, precious metals are soaring while BTC is left behind, reflecting a complex market environment.

The End of the 4-Year Cycle, ETFs Dominate Market Liquidity

The cycle of the crypto asset market driven by Bitcoin halving events (roughly every 4 years, when new block rewards are halved) has significantly changed due to the rise of institutional investor products.

According to market maker Wintermute, “The 4-year cycle is over,” and 2025 is not expected to bring the large rallies once anticipated. Instead, the crypto market is entering a phase of transitioning from speculative assets to established asset classes.

This structural shift is driven by the rapid growth of institutional products such as Exchange-Traded Funds (ETFs) and Digital Asset Trusts (DATs). Wintermute states, “ETFs and DATs function as ‘walled gardens,’ providing ongoing demand for large assets like Bitcoin and Ethereum, but they do not naturally circulate capital throughout the entire market.”

Historically, crypto-native wealth functioned as a circulating pool, with profits from Bitcoin flowing into Ethereum and other altcoins. However, in 2025, the rally periods for average altcoins have shrunk to just 20 days from over 60 days in 2024. A few major assets now absorb most of the new capital, increasing market concentration.

Ethereum is currently trading at $2,960, Solana at $123.51, and XRP at $1.88. The expansion of institutional investment into these major assets is attracting attention as the next wave of cryptocurrencies.

Three Growth Drivers for the Next Cryptocurrency Wave

What factors could serve as catalysts for market expansion? Wintermute highlights three key elements.

First, expansion of asset allocation by institutional investors. Spot ETFs for Solana and XRP are already listed, and applications for various altcoin ETFs are under review. As institutional investors incorporate a broader range of digital assets, investment channels into the next wave of cryptocurrencies are expected to expand.

Second, the revival of wealth effects driven by bullish rallies in BTC or ETH. Significant rises in Bitcoin and Ethereum can generate capital gains for investors, potentially spilling over into a broader altcoin market. If Bitcoin corrects now and then rebounds, this effect is likely to activate.

Third, retail investor capital rotation and new entries. In 2025, retail interest was concentrated in stocks related to AI, rare earths, and quantum computing. The return of retail investors to the crypto market, driven by a recovery in risk appetite, could lead to increased liquidity through stablecoin inflows, raising overall market volatility for the next wave of cryptocurrencies.

In 2026, the Key to Capital Inflow Is “Breaking Concentration”

Wintermute states, “Ultimately, how much capital re-enters digital assets remains uncertain.” The market’s direction depends on whether any of these three catalysts can significantly expand liquidity beyond a few large assets or if the current concentration persists.

For the next wave of cryptocurrencies to demonstrate true value in the upcoming cycle, diversification of capital and market democratization are essential. 2026 is poised to be a pivotal year for this structural transformation in the crypto market.