From "Crime Cycle" to Value Reversion: Four Major Opportunities in the 2026 Crypto Market Outlook

Original author: https://x.com/poopmandefi
Original compilation: 深潮TechFlow

Ansem announced that the market has peaked, and CT referred to this cycle as "criminal."

Projects with high FDV (Fully Diluted Valuation) and no real applications have drained the last penny from the crypto space. The packaged sales of Memecoins have made the crypto industry notorious in the public eye.

Worse still, almost no funds have been reinvested into the ecosystem.

On the other hand, nearly all airdrops have devolved into "pump and dump" scams. The sole purpose of Token Generation Events (TGE) seems to be to provide exit liquidity for early participants and teams.

Hodlers and long-term investors are suffering heavy losses, while most altcoins have never recovered.

The bubble is bursting, token prices are plummeting, and people are furious.

Does this mean it's all over?

Difficult times create strong individuals.

To be fair, 2025 is not a bad year.

We have witnessed the birth of many excellent projects. Projects like Hyperliquid, MetaDAO, Pump.fun, Pendle, and FomoApp have proven that there are still real builders in this space working hard to drive development in the right way.

This is a necessary "purge" to eliminate bad actors.

We are reflecting and will continue to improve.

Now, to attract more capital inflow and users, we need to showcase more real applications, genuine business models, and revenues that can bring actual value to tokens. I believe this is the direction the industry should move towards in 2026.

2025: The Year of Stablecoins, PerpDex, and DAT

Stablecoins Maturing Further

In July 2025, the "Genius Act" was officially signed, marking the birth of the first regulatory framework for payment stablecoins, requiring that stablecoins must be backed by 100% cash or short-term government bonds.

Since then, traditional finance (TradFi) has shown increasing interest in the stablecoin space, with net inflows exceeding $100 billion this year, making it the strongest year in the history of stablecoins.

RWA.xyz

Institutions favor stablecoins, believing they have great potential to replace traditional payment systems for reasons including:

• Lower costs and more efficient cross-border transactions
• Instant settlement
• Low transaction fees
• 24/7 availability
• Hedging against local currency volatility
• On-chain transparency

We have witnessed significant mergers and acquisitions by tech giants (such as Stripe acquiring Bridge and Privy), Circle's IPO being oversubscribed, and several top banks collectively expressing interest in launching their own stablecoins.

All of this indicates that stablecoins have indeed been maturing over the past year.

Stablewatch

Aside from payments, another major application scenario for stablecoins is earning permissionless yields, which we call Yield Bearing Stablecoins (YBS).

This year, the total supply of YBS has actually doubled to $12.5 billion, driven mainly by yield providers like BlackRock BUIDL, Ethena, and sUSDs.

Despite the rapid growth, recent events like Stream Finance and the broader poor performance of the crypto market have affected market sentiment and reduced the yields of these products.

Nevertheless, stablecoins remain one of the few truly sustainable and growing businesses in the crypto space.

PerpDex (Perpetual Contract Decentralized Exchanges):

PerpDex has been another star this year.

According to DeFiLlama data, the open interest of PerpDex has averaged a 3-4x increase, growing from $3 billion to $11 billion, peaking at $23 billion at one point.

The trading volume of perpetual contracts has also surged, skyrocketing 4x since the beginning of the year, from an astonishing $80 billion weekly trading volume to over $300 billion weekly trading volume (part of the growth is also attributed to liquidity mining), making it one of the fastest-growing sectors in the crypto space.

However, since the significant market correction on October 10 and the subsequent market downturn, both metrics have begun to show signs of slowing down.

PerpDex Open Interest (OI), data source: DeFiLlama

The rapid growth of PerpDex poses a real threat to the dominance of centralized exchanges (CEX).

Take Hyperliquid as an example; its perpetual contract trading volume has reached 10% of Binance, and this trend continues. This is not surprising, as traders can find advantages on PerpDex that some CEX perpetual contracts cannot offer:

1. No KYC (Know Your Customer) required
2. Good liquidity, sometimes even comparable to CEX
3. Airdrop speculation opportunities

Valuation games are another key point.

Hyperliquid has demonstrated that PerpDex can achieve extremely high valuation ceilings, attracting a wave of new competitors into the arena.

Some new competitors have received backing from large venture capital (VC) or centralized exchanges (CEX) (such as Lighter, Aster, etc.), while others are trying to differentiate themselves through native mobile applications and loss compensation mechanisms (like Egdex, Variational, etc.).

Retail investors have high expectations for the high FDV (Fully Diluted Valuation) of these projects at launch, while also being excited about airdrop rewards, leading to the "POINTS WAR" we see today.

While PerpDex can achieve extremely high profitability, Hyperliquid has chosen to repurchase $HYPE through an "Assistance Fund," reinjecting profits back into the token (the repurchase amount has accumulated to 3.6% of the total supply).

This repurchase mechanism provides actual value backflow, becoming the main driving force behind the token's success and effectively pioneering the trend of "buyback metaverse"—prompting investors to demand stronger value anchoring rather than high FDV governance tokens with no real utility.

DAT (Digital Asset Treasury):

Due to Trump's pro-crypto stance, we have seen a significant influx of institutional and Wall Street funds into the crypto space.

DAT was inspired by MicroStrategy's strategy and has become one of the main ways for traditional finance (TradFi) to indirectly engage with crypto assets.

Over the past year, approximately 76 new DATs have been added. Currently, the DAT treasury holds crypto assets worth $137 billion. Of these, over 82% are Bitcoin (BTC), about 13% are Ethereum (ETH), with the remainder spread across various altcoins.

See the chart below:

Bitmine (BMNR)

Bitmine (BMNR), launched by Tom Lee, has become one of the iconic highlights of this DAT craze and has become the largest ETH buyer among all DAT participants.

However, despite early attention, most DAT stocks experienced a "pump and dump" trend within the first 10 days. Since October 10, inflows into DAT have plummeted by 90% compared to July levels, with most DAT's net asset value (mNAV) falling below 1, indicating that the premium has disappeared and the DAT craze has essentially come to an end.

In this cycle, we have learned the following:

• Blockchain needs more real-world applications.
• The main use cases in the crypto space remain trading, yield, and payments.
• Nowadays, people tend to choose protocols with fee-generating potential rather than purely decentralized ones (source: @EbisuEthan).
• Most tokens need stronger value anchors tied to the protocol's fundamentals to protect and reward long-term holders.
• A more mature regulatory and legislative environment will provide greater confidence for builders and talent to enter the space.
• Information has become a tradable asset on the internet (source: PM, Kaito).
• New Layer 1/Layer 2 projects without clear positioning or competitive advantages will gradually be eliminated.

So, what will happen next?

2026: The Year of Prediction Markets, More Stablecoins, More Mobile Applications, More Real Income

I believe the crypto space will develop in the following four directions in 2026:

• Prediction Markets
• More stablecoin payment services
• More widespread mobile DApps
• More realization of real income

Still Prediction Markets

Undoubtedly, prediction markets have become one of the hottest sectors in the crypto space.

"You can bet on anything"

"90% accuracy in predicting real-world outcomes"

"Participants bear the risk themselves"

These headlines have attracted significant attention, and the fundamentals of prediction markets are equally compelling.

As of the writing of this article, the total weekly trading volume of prediction markets has surpassed the peak during the election period (even then, including wash trading).

Today, giants like Polymarket and Kalshi have completely dominated the distribution channels and liquidity, leaving competitors without significant differentiation with almost no chance of gaining meaningful market share (except for Opinion Lab).

Institutions are also starting to flood in, with Polymarket receiving investment from ICE at an $8 billion valuation, and its secondary market valuation has reached $12-15 billion. Meanwhile, Kalshi completed its Series E funding at an $11 billion valuation.

This momentum is unstoppable.

Moreover, with the upcoming $POLY token, the forthcoming IPO, and mainstream distribution channels through platforms like Robinhood and Google Search, prediction markets are likely to become one of the main narratives in 2026.

That said, there is still much room for improvement in prediction markets, such as optimizing outcome parsing and dispute resolution mechanisms, developing methods to handle malicious traffic, and maintaining user engagement over long feedback cycles—all of which need further enhancement.

In addition to the dominant market players, we can also expect the emergence of new, more personalized prediction markets, such as ++@BentoDotFun++.

Stablecoin Payment Sector

Following the introduction of the "Genius Act," the increase in institutional interest and activity in stablecoin payments has become one of the main driving forces behind its widespread adoption.

Over the past year, the monthly trading volume of stablecoins has surged to nearly $3 trillion, with adoption accelerating rapidly. While this may not be a perfect metric, it clearly shows significant growth in stablecoin usage following the introduction of the "Genius Act" and the European MiCA framework.

On the other hand, Visa, Mastercard, and Stripe are actively embracing stablecoin payments, whether through supporting stablecoin consumption via traditional payment networks or collaborating with centralized exchanges (CEX) (such as Mastercard's partnership with OKX Pay). Now, merchants can choose to accept stablecoin payments without being limited by customers' payment methods, showcasing the confidence and flexibility of Web2 giants in this asset class.

Meanwhile, crypto neobanks like Etherfi and Argent (now rebranded as Ready) have also started offering card products, allowing users to spend stablecoins directly.

For example, Etherfi's daily spending has steadily grown to over $1 million, with no signs of slowing down.

Etherfi

Nevertheless, we cannot overlook some challenges that crypto neobanks still face, such as high customer acquisition costs (CAC) and the difficulty of profiting from deposits due to users self-custodying assets.

Some potential solutions include providing in-app token exchange features or repackaging yield products to sell as financial services to users.

With chains focused on payments like ++@tempo++ and ++@Plasma++ gearing up, I expect the payment sector to grow significantly, especially driven by the distribution capabilities and brand influence brought by Stripe and Paradigm.

Widespread Adoption of Mobile Applications

Smartphones are becoming increasingly ubiquitous worldwide, with the younger generation driving the shift towards electronic payments.

As of now, nearly 10% of daily transactions globally are completed via mobile devices. Southeast Asia is leading this trend due to its "mobile-first" culture.

Ranking of payment methods by country

This represents a fundamental behavioral shift in traditional payment networks, and I believe that as mobile transaction infrastructure has significantly improved compared to a few years ago, this shift will naturally extend to the crypto space.

Remember the account abstraction, unified interfaces, and mobile SDKs in tools like Privy?

Today's mobile user onboarding experience is much smoother than it was two years ago.

According to research by a16z Crypto, the number of crypto mobile wallet users has increased by 23% year-on-year, and this trend shows no signs of slowing down.

In addition to the changing consumption habits of Generation Z (Gen Z), we are also seeing more native mobile DApps emerging in 2025.

For example, Fomo App, as a social trading application, has attracted a large number of new users with its intuitive and unified user experience, allowing anyone to easily participate in token trading even without prior knowledge.

Developed in just six months, the app has achieved an average daily trading volume of $3 million and peaked at $13 million in October.

With the rise of Fomo, major players like Aave and Polymarket are also prioritizing mobile savings and betting experiences. New entrants like @sproutfi_xyz are attempting to implement mobile-centric yield models.

As mobile behavior continues to grow, I expect mobile DApps to become one of the fastest-expanding areas in 2026.

Give Me More Income

One of the main reasons people find it hard to believe in this cycle is simple:

Most tokens listed on major exchanges still generate almost no meaningful income, and even when they do, there is a lack of value anchoring between their tokens or "shares." Once the narrative fades, these tokens cannot attract sustainable buyers, and the subsequent trend often only goes in one direction—downward.

Clearly, the crypto industry is overly reliant on speculation while paying insufficient attention to real business fundamentals.

Most DeFi projects have fallen into the trap of designing "Ponzi schemes" to drive early adoption, but the result each time is a shift in focus to how to sell off after the Token Generation Event (TGE), rather than building a lasting product.

So far, only 60 protocols have generated over $1 million in revenue within 30 days. In contrast, around 5,000-7,000 IT companies in Web2 achieve this level of monthly revenue.

Fortunately, with Trump's pro-crypto policies driving change, 2025 has seen a shift. These policies have made profit-sharing possible and helped address the long-standing lack of value anchoring for tokens.

Projects like Hyperliquid, Pump, Uniswap, and Aave are actively focusing on product and revenue growth. They recognize that crypto is an ecosystem centered around holding assets, which naturally requires positive value backflow.

That is why buybacks have become such a powerful value anchoring tool in 2025, as it is one of the clearest signals of alignment between the interests of teams and investors.

So, which businesses are generating the strongest income?

The main use cases in crypto remain trading, yield, and payments.

However, due to the compression of costs in blockchain infrastructure, chain-level revenues are expected to decline by about 40% this year. In contrast, decentralized exchanges (DEX), exchanges, wallets, trading terminals, and applications have become the biggest winners, growing by 113%!

Please bet more on applications and DEX.

If you still don't believe it, according to research by 1kx, we are actually experiencing the highest peak of value flowing to token holders in crypto history. See the data below:

Conclusion

The crypto industry is not over; it is evolving. We are undergoing a "purge" that the market needs, which will make the crypto ecosystem better than ever, even tenfold.

Those projects that can survive, achieve real-world applications, create real income, and build tokens with actual utility or value backflow will ultimately become the biggest winners.

2026 will be a key year. ```