Mohammedia – Crypto markets are moving toward a more concentrated and structurally driven phase, according to a new outlook from Coinbase Institutional that positions 2026 as a turning point for how digital asset trading and adoption function under tighter conditions.
In the report, Coinbase Institutional argues that traditional boom-and-bust crypto cycles are losing relevance as institutional participation, derivatives infrastructure, and payment activity increasingly shape market behavior.
The analysis was authored by global head of research David Duong and research associate Colin Basco.
Rather than retail speculation or token-specific narratives, the firm says activity is consolidating around a smaller number of core markets that are proving resilient even as leverage and risk appetite are reduced.
Derivatives reshape price formation
Perpetual futures now account for the majority of trading volume across major crypto venues, according to Coinbase, placing derivatives at the center of price discovery.
The report notes that pricing dynamics are increasingly influenced by positioning, funding rates, and liquidity conditions rather than short-term momentum.
Following widespread liquidation events in late 2025, leverage levels declined sharply, particularly in derivatives markets.
Coinbase characterizes this as a structural reset rather than a withdrawal of participation, with tighter margin requirements and improved risk controls allowing markets to absorb volatility more efficiently.
Despite the drawdown, activity in perpetual futures remained resilient, reinforcing their role as a foundational component of crypto liquidity heading into 2026.
Prediction markets gain institutional traction
Coinbase also identifies prediction markets as a second area of accelerating activity, pointing to rising notional volumes and deeper liquidity.
Once viewed as experimental, these platforms are increasingly used for information discovery and risk transfer, the report says.
Fragmentation across prediction market platforms is driving demand for aggregation and efficiency, a shift that Coinbase says is attracting more sophisticated participants.
Improved regulatory clarity in certain jurisdictions has further supported broader adoption beyond crypto-native traders.
Stablecoins anchor real-world usage
The third area highlighted by Coinbase centers on stablecoins and payments, which the firm describes as crypto’s most persistent source of real-world activity.
Stablecoin transaction volumes continue to grow through settlement, cross-border transfers, and liquidity management rather than speculative trading.
Payment activity is becoming more interconnected with automated trading strategies and emerging AI-driven applications.
Coinbase argues that these developments reinforce blockchain-based payments as core digital infrastructure.
According to the firm, 2026 will test whether these markets can continue to scale and manage risk under more disciplined conditions, a process it believes will shape crypto well beyond the next price cycle.
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