2025 was a blockbuster year for Bitcoin (BTC) and the broader cryptocurrency market, as pro-crypto lawmakers introduced growth-focused regulations and Wall Street finally accepted Bitcoin, Ether (ETH), and numerous altcoins as crucial asset classes worthy of inclusion in an investment portfolio.

The global bid for Bitcoin, Ether and Solana SOL Token (SOL) has been almost immeasurable, with total net flows into Bitcoin spot ETFs reaching $57 billion and total net assets across ETFs reaching $114.8 billion.

In 2026, the real question is whether the pace of institutional, corporate and government adoption, which was a key pricing driver in 2025, will continue. Since October, powerful inflows into the Bitcoin ETF spot market have moderated and in some cases turned into a sellers’ market for several weeks, followed by a correction of 30% for BTC and 50% for Ether.

In interview with Nicole Petallides of Schwab Network, Cointelegraph Chief Market Officer Ray Salmond said that the performance of the cryptocurrency market in early 2026 will depend on a number of factors.

“Given how narratives around AI, Fed rate cuts, strategic Bitcoin reserves, and ETF flows have driven the market, I’m curious if these same narratives will be the catalyst for price increases in 2026, or will a new narrative need to emerge to bring buyers back to the markets?

.@Cointelegraphsays director of markets Ray Salmond @NPetallides that demand for bitcoin, ethereum and solan in the spot and ETF markets is expected to set the tone for the industry in 2026.

For more market news, visit: https://t.co/PYaqKPRp8C pic.twitter.com/ZCp1EIXyUh

— Schwab Network (@SchwabNetwork) December 22, 2025

Beyond ETF flows and demand from spot markets like Binance and Coinbase, investor sentiment regarding the massive growth of the AI ​​industry and the performance of the high-tech S&P 500 Index will likely have a direct impact on cryptocurrency markets.

AI developments, company valuations, fundraising, IPO performance, and whether data center hyperscalers will continue to drive stock markets with MAG7 will remain on everyone’s radar.

In the interview, Salmond said rapid balance sheet expansion is a strategy that will boost tech stocks in 2025 as hyperscalers spend double-digit billions on data centers, compute, Nvidia GPUs and energy. At some point in 2026, these companies are expected to demonstrate that they can monetize their investments or at least finance expansion from their internal cash flow.

Share prices of Oracle, Meta and Nvidia fell in the second half of 2025 as the market questioned whether there was a risk that some of these companies’ free cash flow could decline. If investors smell smoke from debt-laden and cash-strapped AI and quantum computing companies in 2026, they will likely face a negative reaction. How these shockwaves spill over into the SPX, DOW and, indirectly, cryptocurrencies is something investors will need to keep on their watchlist.

Will the passage of the Clarity Act supercharge altcoins, DeFi and gigantic caps?

A bullish event to watch in early 2026 will be whether the Clarity Act becomes law. The crypto lobby had been pushing for this bill to go into effect before the end of the year, but the long government shutdown delayed progress on it.

If passed, the Clarity Act would provide clearer rules and the necessary environment for FinTech innovators in the U.S. sandbox. The hope is that more foreign cryptocurrency companies will be headquartered in the United States.

It will determine which regulators (SEC and CFTC) have jurisdiction over different crypto assets, depending on whether they are classified as securities or commodities. There is also a powerful focus on consumer protection, and a better framework in this area could provide the necessary transparency that companies and consumers need to confidently invest in crypto assets.

Will pro-Trump Fed leadership and simple money policies accelerate markets?

The Federal Reserve’s policy shift is expected to continue to evolve into an simple money regime, and U.S. President Donald Trump’s election as Fed chairman in early 2026 is expected to result in interest rate cuts of up to 100 basis points.

According to Salmond

“Crypto investors view Fed rate cuts as bullish for risky assets, but we have a Tale of Two Cities scenario where the data clashes with the most bullish outlook.”

Salmond explained that “the labor market is weakening and this cooling trend is expected to continue into 2026. The ‘temporary’ impact of Trump’s tariffs has resulted in higher costs of goods and services, increased health insurance premiums, and retail investor confidence may decline as layoffs are announced, consumer debt increases and disposable incomes decline.”

At the same time, “investors expect Fed rate cuts to lower mortgage rates, force banks to loosen their lending purses and encourage consumers to buy more things. But the potential return of easy money and big government spending essentially confirms the U.S. is kicking the debt bomb further down the road.”

Related: JPMorgan Investigates Crypto Trading for Institutional Clients: Report

Investors will be faced with a dilemma in the first quarter of 2026: Will there be signs that the Fed’s simple money trade is being overtaken and possibly sold upon confirmation, or will evolving Fed policy also revive the bull run seen in stocks in 2025 and extend to cryptocurrencies as well?

Investors who prioritize optionality and flexibility should be able to avoid some of the pitfalls of a narrative-driven and speculative market where the MAG7 and AI markets may prove overvalued.

On paper, the overall picture for 2026 is bullish, especially given Trump’s economic mandate, Fed policies and cryptocurrency-friendly regulations, but it is the unknown results of AI development and the real impact of interest rate cuts on consumers and the economy that will determine the direction markets take in the first and second quarters.

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