When the K-line chart of Bitcoin is overlaid with the buying curves of sovereign funds, listed companies, and Wall Street ETFs, the traditional four-year cycle pendulum seems to be pushed toward a new trajectory by an unprecedented force.
The cryptocurrency market at the beginning of 2026, after experiencing year-end adjustments, is embarking on a clearer structural path. The focus of the market has shifted from a purely halving narrative to a more fundamental proposition: in the context of institutional capital building positions on a large scale, will Bitcoin follow the historical cyclical laws, or will it initiate an unprecedented "super cycle"?
The core of the debate lies in whether the massive funds introduced by compliant channels represented by spot ETFs are sufficient to permanently change the market's supply and demand structure and volatility characteristics.
1. A New Starting Point After Clearing the Battlefield
● The year-end cleanup of the market has paved the way for 2026. At the end of 2025, the Bitcoin options market experienced the largest position reset on record, with over 45% of open contracts being cleared. This process removed the "structural price peg" effect caused by market makers' hedging positions, providing a clearer market for risk expression in the new year.
● On-chain data shows that the profit-taking pressure from long-term holders, who had been suppressing prices in the fourth quarter of 2025, has significantly weakened. The reduction in selling pressure has stabilized the market, laying the foundation for new upward momentum.
● However, new challenges have emerged. The market rebound is entering a region dominated by investors who recently bought near historical highs, with their costs densely distributed between $92,100 and $117,400.
This means there is a natural "supply wall" above the price, and any sustained bull market will require time and resilience to digest this supply.
2. Super Cycle Narrative: The Three Pillars of Institutionalization
The optimistic expectations for a "super cycle" are not unfounded; they are built on three pillars of deep institutional capital involvement.
● The first pillar is explosive capital inflow predictions. A joint study by asset management firms Bitwise and UTXO Management predicts that by the end of 2026, institutional capital inflows into Bitcoin could exceed $400 billion, accumulating over 4.2 million BTC.
○ This is equivalent to about 20% of Bitcoin's current circulating supply. The report notes that this wave will come from public company treasuries, sovereign wealth funds, and wealth management platforms.
● The second pillar is comprehensive access to the traditional financial system. In 2026, digital asset services led by banks for retail and private wealth clients are set to be launched on a large scale.
○ Bank of America has already provided crypto investment services to its wealth management clients in 2025, and platforms like Charles Schwab and E*TRADE are preparing new products. Regulatory progress is accelerating internal approvals, paving the way for deeper integration in the next 12 to 18 months.
● The third pillar is the potential tailwind from macroeconomic policies. Analysts like Cas Abbé and other KOLs point out that a series of possible macro catalysts are brewing, including four cumulative interest rate cuts by the third quarter of 2026, the end of quantitative tightening, and the passage of cryptocurrency market structure legislation.
If these factors materialize, they will greatly improve market liquidity and enhance risk appetite.
3. The Diverse Faces of Institutions: From ETFs to National Actors
Institutional demand is not monolithic but presents multi-layered and differentiated characteristics.
● The most notable is the U.S. spot Bitcoin ETF. In 2025, the total capital inflow into Bitcoin and Ethereum ETFs reached approximately $31 billion, with their trading volume accounting for 30% of the total spot market. Gabe Selby, research director at CF Benchmarks, points out that institutions will be the main driving force in 2026, with 14 U.S. spot ETFs currently managing over $100 billion in assets.
● However, behind the ETF frenzy lies hidden concerns. Bitwise predicts that over 100 crypto-related ETFs will be launched in 2026, but Bloomberg analysts warn that "we will witness a large number of ETF liquidations."
● The high concentration of custody rights in firms like Coinbase (which holds 85% of the global Bitcoin ETF custody share) poses a potential "single point of failure" risk.
● Another important force is corporate treasuries and sovereign entities. Although corporate buying behavior shows "event-driven" phase characteristics rather than continuous structural accumulation, they do provide critical support for prices.
● The longer-term narrative involves sovereign nations. Predictions suggest that at least five U.S. states and four new countries may officially incorporate Bitcoin into their strategic reserves in 2026.
4. Market Resistance and Divisions
Despite the optimistic outlook, the road to new highs is far from smooth. The market currently faces multiple resistances and profound internal divisions.
● The primary resistance is the heavy supply pressure above. On-chain data from Glassnode clearly indicates that the market is currently in a region dominated by "recent top buyers."
These investors, who bought near cycle peaks, may create sustained selling pressure once prices rebound close to their breakeven points. Breaking through this area requires strong and sustained buying.
● A key observation indicator is the cost basis of short-term holders, currently around $99,100. Whether the market can maintain above this price is seen as a critical confirmation signal for restoring market confidence and turning the trend constructive. If this level cannot be reclaimed for an extended period, the risk of the market returning to a deeper bear market will significantly increase.
● The market's division is also severe. Funds are efficiently concentrating on leading assets rather than experiencing broad-based increases. This "Matthew effect" is particularly evident in the ETF market: more products will solidify the core positions of Bitcoin, Ethereum, and Solana.
Meanwhile, a large number of long-tail tokens lacking actual utility and cash flow may face a liquidity exhaustion crisis.
5. Deep Transformations Beyond Cycles: Reshaping Infrastructure
Regardless of how price cycles unfold, deeper changes in market infrastructure are occurring in 2026, which may have more long-term significance than short-term price fluctuations.
● Stablecoins are becoming core financial infrastructure. Their market capitalization grew by 49% in 2025, reaching approximately $300 billion. They play a crucial role not only in trading and DeFi but also in cross-border payments and commercial circulation.
● Asset tokenization is moving from pilot projects to large-scale production. BlackRock's tokenized money market fund surpassed $500 million in assets under management in 2025, and JPMorgan has also launched the MONY product on Ethereum.
● Decentralized finance is evolving into a unified liquidity layer. Although its total locked value decreased at the beginning of 2026, DeFi is being adopted by banks and traditional financial institutions as a core financial infrastructure for trading, credit, and yield conversion.
● The industry is shifting from a passive response to market cycles to actively reshaping the market structure itself. The adoption of banks, tokenization, stablecoin transformation, and DeFi maturation—these interrelated developments collectively mark the transition of cryptocurrency to an indispensable component of global financial infrastructure.
As traditional financial giants like BlackRock have accumulated over $67 billion in Bitcoin ETF holdings, as Morgan Stanley prepares to launch new crypto ETFs, and as stablecoins circulate on-chain at a volume of $300 billion, the underlying logic of the market has changed.
Whether the super cycle can be realized will ultimately depend on whether these profound structural changes can continue to attract and accommodate the massive capital from the traditional world seeking new growth.
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