TradFi Ruled Crypto In 2025, Will Fed Rate Cuts Trigger New Highs In 2026?
In 2025, Bitcoin and the broader crypto market experienced significant growth due to supportive regulation and widespread institutional acceptance, with spot Bitcoin ETFs seeing $57 billion in net inflows and reaching $114.8 billion in assets. However, ETF inflows slowed toward year-end, resulting in a subsequent 30% correction for Bitcoin and a 50% drop for Ether. The outlook for 2026 depends on continued institutional, corporate, and government adoption, as well as the effects of AI industry expansion and tech sector performance. The possible passage of the Clarity Act could further boost the U.S. crypto industry by providing regulatory clarity and encouraging innovation. The expected shift to easier monetary policy under a new Fed chair, including anticipated rate cuts, could support risk assets, though concerns remain about consumer confidence, rising debt, and market overvaluation, especially if AI-related firms struggle to sustain their growth. Overall, while the backdrop remains bullish due to policy and regulatory trends, outcomes in 2026 will hinge on macroeconomic factors, AI sector monetization, and investor sentiment.
