Predicting 2026: The Crossroads of Cryptocurrency's Future

What Will the Cryptocurrency Market Look Like in 2026?—A Three-Point Summary

1 | From Speculation to Genuine Financial Infrastructure—2026 Marks a Turning Point for Institutional Financialization

In 2026, cryptocurrencies will transition from being seen as speculative assets to being recognized as legitimate financial infrastructure and institutional financial products. In Japan, this shift will be marked by the introduction of insider trading regulations, tax reforms, the establishment of cryptocurrency brokerage services, and the expansion of stablecoins and tokenized deposits. In the US, the Genius Act and physical ETFs will play central roles, facilitating the full-fledged entry of institutional investors and traditional finance.

2 | Regulatory Frameworks: A Double-Edged Sword—Facilitating Entry While Intensifying Regulations Selects Market Winners

However, these regulatory designs will act as a double-edged sword, reshaping the market dynamics. Enhanced requirements for reserve assets, licensing, and AML compliance will ease operations for well-established players, but depending on the political climate in the US (Trump administration + midterm elections), stringent regulations could disproportionately burden smaller players, leading to exits and potential market contraction.

3 | The End of Bitcoin's Four-Year Cycle? Transitioning to a Market Linked with AI, Macro Factors, and Regulations

On the price and technology fronts, the myth of Bitcoin's 'four-year cycle' is waning, shifting towards a market that aligns more closely with macroeconomic conditions, regulatory frameworks, and AI infrastructure. As investments in data centers and the EU AI Act progress, alongside the 2026 issue of data exhaustion, cryptocurrencies will enter a phase where they are heavily influenced by external factors, becoming part of the next-generation internet finance linked with AI, digital securities, and stablecoins, albeit with reduced volatility.

Advancing Towards Social Implementation While Regulatory Nets Tighten—The 'Two Paths' Shown in 2025

In 2025, countries advanced in crafting laws concerning cryptocurrencies, focusing on their full-scale social implementation.

Simultaneously, in response to issues that had arisen, countries like the US and Singapore also implemented concurrent regulations on cryptocurrencies.

Reflecting on the actions of various countries, the future trends in the cryptocurrency industry seem to be polarizing.

'25 JANUARY｜The Second Trump Administration Takes Office in the US

Donald Trump won the 2024 presidential election and took office in January, advancing an America-first policy agenda, including the so-called 'Trump tariffs' that disrupted the global economy.

'25 JUNE｜Amendment to the Funds Settlement Law Passed in Japan

In June, Japan passed an amendment to the Funds Settlement Law, set to be implemented in mid-2026. This law revision, aimed at the digitalization of finance in general, includes numerous new regulations related to cryptocurrencies.

For cryptocurrencies, the amendment introduces a new licensing requirement for brokerage services, making it easier for non-financial firms to enter the market as intermediaries.

Additionally, the regulations on stablecoins have been revised to ease the requirements for backing assets, supporting their wider adoption.

On the other hand, in the event of a foreign exchange collapse, a system has been added to ensure that users' assets do not flow out of the country. There are also regulations on companies conducting international transfers as part of anti-money laundering measures.

'25 AUGUST｜First Issuance of a Stablecoin in Japan

In August, Japan approved its first yen-denominated stablecoin, which was officially issued in October. Backed by Japanese yen deposits and government bonds, it guarantees redemption at the same amount in yen.

The interest earned on government bonds is returned to users instead of being charged as fees, enabling low-cost international transfers and making the business viable.

Since the issuer is not in charge of setting up the payment system, the widespread adoption among the general public remains uncertain. The overall dependence on government bonds poses challenges depending on global circumstances, but it represents a significant step forward.

'25 AUGUST｜Regulatory Tightening in Singapore

Starting in the summer, Singapore introduced several regulations in the Web3.0 domain, signaling a shift from its previously flexible stance.

While Singapore has been a popular hub for cryptocurrency businesses due to its lax regulations, issues such as money laundering through paper companies and significant cryptocurrency outflows have prompted a shift towards stricter regulatory frameworks.

Whether operating domestically or internationally, businesses in Singapore now require a license, creating a challenging environment for startups.

'25 OCTOBER｜US Government Shutdown Halts ETF Reviews

Due to congressional disagreements, the new budget for October failed to pass, leading to the closure of some government agencies. This shutdown halted various government functions across the US, including the review of ETFs (Exchange Traded Funds).

What's Next for Cryptocurrencies?

Regulatory frameworks for cryptocurrencies are advancing in various countries. The stage of speculative investment at one's own risk is passing, and mechanisms to protect domestic assets in the event of exchange failures are being established, along with rules to eliminate irresponsible operators, preparing for full social implementation.

As measures against crimes like money laundering and unscrupulous operators accelerate, the regulations could potentially lead to a decrease in market participation and a contraction of the market itself.