Coinbase Institutional's latest report outlines structural shifts reshaping the crypto market in 2026, moving away from traditional boom-and-bust cycles toward institutional participation and real-world adoption. Authored by David Duong and Colin Basco, the outlook highlights perpetual futures, prediction markets, and stablecoins as key drivers. These forces are expected to test the market's ability to scale under tighter financial conditions.
Coinbase Institutional's report, released on December 28, 2025, argues that crypto markets are entering a new phase defined by structural forces rather than hype-driven speculation. Written by global head of research David Duong and research associate Colin Basco, it posits that familiar cycle models—centered on retail speculation and token launches—are becoming less reliable as institutions play a larger role in price behavior.
The first area, perpetual futures, now anchors price discovery, with derivatives accounting for the majority of trading volume on major venues. The report notes that leverage was sharply reduced following liquidation events in late 2025, describing this as a 'structural reset' that removed speculative excess while maintaining resilient participation. Tighter margin practices and improved risk controls are said to help markets absorb shocks more efficiently.
Prediction markets are evolving from experimental tools into durable financial infrastructure, evidenced by rising notional volumes and deeper liquidity. Coinbase points to fragmentation across platforms driving demand for aggregation, attracting sophisticated participants beyond crypto-native traders, especially with improving regulatory clarity.
Stablecoins and payments form the third pillar, serving as crypto's most persistent real-world usage. Duong and Basco write that stablecoin transaction volumes continue to grow through settlement, cross-border transfers, and liquidity management. The firm forecasts stablecoin market capitalization could approach $1.2 trillion by 2028, with payment activity integrating into automated trading and AI-driven applications.
Regulatory progress in 2025, including spot crypto ETFs and clearer compliance rules, has laid the foundation for deeper institutional involvement, focusing on risk management and operational efficiency. Coinbase views 2026 as a test of whether these markets can scale and manage risk under disciplined conditions, potentially shaping crypto's long-term future.