Predicting 2026: The Crossroads of Cryptocurrency's Future

What Will the Cryptocurrency Market Look Like in 2026?—A Summary of Three Key Points

1 | Cryptocurrencies Transition from Speculation to Genuine Financial Infrastructure—A Midpoint in Institutional Financialization in 2026

2026 marks a pivotal year as cryptocurrencies transition from 'speculative assets' to established financial infrastructure and institutional financial products. In Japan, this includes the introduction of insider trading regulations, tax reforms, the establishment of cryptocurrency brokerage firms, and the expansion of stablecoins/tokenized deposits. In the USA, the Genius Act and physical ETFs will drive significant entry by institutional investors and traditional finance sectors.

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

However, this regulatory design acts as a double-edged sword, encouraging entry while intensifying regulations, reshaping the market's power dynamics. Enhanced requirements for reserve assets, licensing, and AML compliance make it easier for 'proper players' to operate, but depending on political developments in the US (Trump administration + mid-term elections), regulatory burdens could become overly heavy, leading to the exit of smaller players and potential market contraction.

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

In terms of price and technology, the myth of Bitcoin's 'four-year cycle' is wavering, transitioning to a market linked with macro environments, regulatory frameworks, and AI infrastructure. As constraints and reorganizations on the AI side, such as data center investments, the EU AI Act, and the 2026 problem (data exhaustion), progress, cryptocurrencies will enter a phase strongly influenced by external factors as part of 'next-generation Internet finance', linking AI, digital securities, and stablecoins, while keeping volatility in check.

While Advancing Towards Societal Implementation, Regulatory Nets Also Tighten—2025 Showed 'Two Paths'

2025 was a year in which countries advanced their legal frameworks related to cryptocurrencies, with a focus on full societal implementation.

At the same time, countries like the USA and Singapore have also implemented regulations in response to past issues.

Reviewing the movements of various countries, we anticipate the future trends in the cryptocurrency industry as national stances continue to diverge.

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

Donald Trump won the 2024 presidential election and took office in January. True to his statements, he further advanced America-first policies, causing global economic turmoil with the so-called 'Trump tariffs'.

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

In June, Japan enacted an amendment to the Funds Settlement Law.

The enforcement is expected to start in mid-2026. This law revision, with an eye on the overall digitalization of finance, includes many new systems related to cryptocurrencies.

Regarding cryptocurrencies, the law newly sets up a 'brokerage' license for cryptocurrency transactions, making it easier for non-financial companies to enter the market if they act as intermediaries.

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

Additionally, in case of a collapse of exchanges abroad, a system has been added to mandate the domestic holding of assets to prevent the outflow of user assets overseas. There are also regulations on companies conducting international money 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. Japanese yen deposits and Japanese government bonds back it, allowing redemption for an equivalent amount of Japanese yen.

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

Since the issuer is not in charge of setting up the payment system, its widespread adoption remains uncertain. The overall dependence on government bonds poses challenges depending on future 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, indicating a shift from its previously flexible stance.

Singapore, popular as a base for cryptocurrency businesses due to its lax regulations, has moved towards strict rule-making due to issues like money laundering through paper companies and significant capital outflows in cryptocurrencies.

Whether operating domestically or internationally, Singaporean operators now require a license, creating a challenging environment for startups.

'25 OCTOBER｜US Government Shutdown Halts ETF Reviews

Due to congressional disagreements, a new budget failed to pass in October, leading to the shutdown of some government agencies. Various government functions across the USA were halted, including the review of ETFs (Exchange-Traded Funds).

What's Next for Cryptocurrencies?

Cryptocurrency-related systems are being developed in various countries. The stage of being mere speculative objects of personal responsibility has passed, and preparations for societal implementation are steadily progressing with systems in place to protect domestic assets in case of exchange failures and rules to eliminate irresponsible operators.

Regulations on cryptocurrencies are rapidly advancing as measures against their misuse for crimes such as money laundering and against malicious operators. While they have not yet fully taken root in society, the increase in regulations could lead to a decrease in market participation and potential market contraction.