2025 was a successful year for Bitcoin (BTC) and the broader crypto market as pro-crypto-platform lawmakers focused regulation on growth and Wall Street finally accepted Bitcoin, Ether (ETH) and numerous altcoins as a valid asset class worthy of inclusion in an investment portfolio.
The global supply of Bitcoin, Ether and Solana’s SOL (SOL) token was almost immeasurable, with total net flows into spot Bitcoin ETFs reaching $57 billion and total net assets of all ETFs reaching $114.8 billion.
Entering 2026, the real question is whether the pace of adoption at the institutional, corporate and government levels, which were key price drivers in 2025, will continue? Since October, strong inflows into spot Bitcoin ETFs have subsided and, in some cases, turned into a seller’s market for weeks on end, followed by a 30% correction in BTC and 50% in Ether.
In an interview with Schwab Network’s Nicole Petallides, Cointelegraph Market Manager Ray Salmond said that the performance of the crypto market in early 2026 will depend on a number of factors.
“Given how stories surrounding AI, Fed rate cuts, Bitcoin strategic reserve and ETF flows have driven the market, I’m curious to see if the same stories will catalyze price growth in 2026, or will a new story have to emerge to bring buyers back into the markets?”
.@CointelegraphMarket Manager Ray Salmond speaks @NPetallides that he expects demand for bitcoin, ethereum and salt in the spot and ETF markets to set the tone for the industry in 2026.
For more market news, follow: https://t.co/PYaqKPRp8C pic.twitter.com/ZCp1EIXyUh
— Schwab Network (@SchwabNetwork) December 22, 2025
In addition to ETF flows and demand on spot markets like Binance and Coinbase, investor sentiment regarding the sheer size of the AI industry build-out and the performance of the tech-heavy S&P 500 will likely have a direct impact on crypto markets.
Building AI, company valuations, fundraising, IPO performance and whether data center hyperscalers will continue to drive equity markets alongside MAG7 will remain the focus of everyone’s attention.
In the interview, Salmond explained that rapid balance sheet expansion was the strategy that boosted tech-related stocks in 2025 as hyperscalers spent double-digit billions on data centers, computing, Nvidia GPUs and energy. At some point in 2026, these companies are expected to demonstrate that they can cash in on their investments or at least fund expansions from their internal cash flow.
In the second half of 2025, Oracle, Meta and Nvidia saw their share prices fall as the market wondered if there was a chance that some of these companies’ free cash flow could turn negative. If investors smell the smoke associated with debt-heavy, cash-poor AI and quantum computing companies in 2026, there will likely be some backlash. How these shock waves translate to the SPX, DOW and, via intermediaries, cryptocurrencies is something investors will need to keep on their watch list.
Will enactment of the Clarity Act further tax altcoins, DeFi and large caps?
A bullish event worth watching in early 2026 will be whether or not the Clarity Act becomes law. Cryptolobby had aimed to have this bill become law before the end of the year, but a prolonged government shutdown has delayed progress on its resolution.
If passed, the Clarity Act will provide clearer rules and the necessary environment for FinTech innovators in the US sandbox, and hopefully more offshore crypto companies will be headquartered back in the United States.
It will define which regulatory bodies (SEC and CFTC) have jurisdiction over different crypto assets, depending on whether they are classified as securities or commodities. There is also a strong emphasis on consumer protection, and a better framework in this area could provide the necessary transparency that businesses and consumers need to invest in crypto assets with confidence.
Will Trump’s Fed Chair and Easy Money Policy Boost Markets?
The Federal Reserve’s policy shift is expected to turn further into a regime of easy profits, and the election of the Fed chairman in early 2026 is expected to bring up to 100 basis points in rate cuts.
According to Salmond,
“Crypto investors view the Fed rate cut as positive for risk assets, but we have a Tale of Two Cities scenario where the data collides with the most favorable outlook.”
Salmond explained that “the labor market is softening and this cooling trend is forecast to continue into 2026. The ‘pass-through’ impact of Trump’s tariffs has resulted in higher costs of goods and services, health insurance premiums will rise and retail investor confidence could fall as layoffs are announced, consumer debt rises and disposable income falls.”
At the same time, “investors expect the Fed’s interest rate cuts to result in lower mortgage rates, force banks to loosen their lending purses and entice consumers to buy more stuff. But the potential return of easy money and big government spending essentially confirms that the US is dropping the debt bomb even more.”
Related: JPMorgan Investigates Crypto Trading for Institutional Clients: Report
In the first quarter of 2026, the dilemma investors will have to face is whether there are signals to prove that the Fed’s trade in easy money is at the fore and likely to sell on confirmation, or will the Fed’s evolving policy also revive the bull market seen among stocks in 2025 and extend to crypto?
Investors who prefer optionality and a nimble trail should be able to avoid some of the pitfalls of a market driven by talk and speculation, where the MAG7 and AI markets could prove overvalued.
On paper, the big picture outlook for 2026 is bullish, especially when considering Trump’s economic mandate, Fed policy and crypto-friendly regulation, but the unknown outcomes of AI construction and the real impact of rate cuts on consumers and the economy will determine the direction of the market in Q1 and Q2.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision. Although we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision. Although we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from your reliance on this information.
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