Crypto is starting to become firmly embedded in the financial system, but this is likely to hurt digital assets without institutional backing.
That is according to trading platform Grayscale’s latest comprehensive industry report, 2026 Digital Asset Outlook: Dawn of the Institutional Era.
The main conclusion of the report came at the end, where it stated: “We expect crypto’s institutional era to create sharper distinctions between assets with access to regulated venues and institutional capital, and those without the same access.
“Crypto is entering a new era, and not every token will make a successful transition from the old one.”
Grayscale noted that the last few years have seen a complete turnaround on the regulatory attitude of the US towards crypto – from hostility to a much more favourable environment.
This year, Congress passed the GENIUS Act, which provided much needed clarity over the legal status of stablecoins.. In 2026, Grayscale predicts Congress will pass further bipartisan crypto market structure legislation to cement blockchain-based finance in the US.
This shift has also led Grayscale to also forecast that there will be a rise in valuations across all types of traded digital assets into 2026, signifying a four-year cycle – longer than the average. Bitcoin could even see its price reach a new record in the first half of next year.
“Grayscale believes that the crypto asset class is in a sustained bull market,” the report stated.
The report noted that in each prior bull market, Bitcoin’s price increased by at least 1,000% over a one-year period. However, in this run the maximum year-over-year price increase was around 240%, which Grayscale attributed to “steadier institutional buying recently compared to retail momentum chasing”.
One big institutional trend with potential for significant growth is the use of crypto Exchange Traded Products (ETPs), the report stated.
Since the first Bitcoin ETPs launched in the US in January 2024, global crypto ETPs have seen net inflows of $87bn. Much more money might flow into these products if and when crypto becomes widely held in investment portfolios.
Grayscale estimates that less than 0.5% of US advised wealth is allocated to the crypto asset class.
“This number should grow as more platforms complete their due diligence, build out capital market assumptions, and incorporate crypto into model portfolios,” the report stated.
Large institutions which have already adopted crypto ETPs in their portfolios, include Harvard Management Company and Mubadala, an Abu Dhabi sovereign wealth fund.
“We expect this list to grow significantly in 2026,” the report predicted.
