CoinShares' 3 Major Crypto Predictions for 2026: Mining Model Differentiation, Investment Focus, and the Rise of the Prediction Market

This article is not intended as investment advice. Readers are advised to strictly abide by local laws and regulations.

CoinShares has released its annual digital asset outlook report. Here are some key takeaways from the "Conclusion: Emerging Trends and New Frontiers" section:

1. Strong Recovery in Crypto VC Funding: Crypto VC funding in 2025 has already surpassed last year's figure, confirming that crypto investment is a "high beta" indicator of macro liquidity. With an expected easing macroeconomic environment, capital inflows will continue, supporting growth in 2026.

2. VC investment focuses on "big deals" and utility: Investment style is shifting from diversification to "large deals concentration", with capital tilting towards a few top projects and paying more attention to the actual utility and cash flow of projects, rather than empty concept hype or meme coins.

3.2026 Four Major Investment Sectors: Looking ahead to next year, VCs will focus on RWA (with stablecoins at its core), consumer applications combining AI and crypto, on-chain investment platforms for retail investors, and infrastructure to enhance the usability of Bitcoin.

4. Prediction markets have evolved into information tools: Prediction markets, exemplified by Polymarket, have transcended their niche status and become mainstream information infrastructure. Their trading activity remained high even after the election, and their market odds have proven to be highly accurate.

5. Institutionalization of Prediction Markets: Prediction markets are accelerating their institutionalization, with the strategic investment from ICE, the parent company of the NYSE, being a key signal. This indicates that traditional financial institutions recognize their value, and prediction markets are expected to continue to expand their influence and create new trading records through competition and consolidation.

6. Mining companies are accelerating their transformation to HPC (High-Performance Computing): Bitcoin mining companies are undergoing a fundamental shift in their business models, moving towards higher-profit HPC/AI data centers. It is projected that by the end of 2026, mining revenue will account for less than 20% of the total revenue of these companies, driven by the fact that HPC profit margins are approximately three times that of mining.

7. Short-term lag in computing power growth: Despite the strategic shift to HPC, the overall network computing power is still in a period of strong growth due to the concentrated delivery of large orders from 2024 in 2025. This is a short-term phenomenon, with companies such as Bitdeer and IREN being the main drivers of growth.

8. Future Mining Models Differentiate: Traditional industrial-grade mining will be replaced, and future mining will differentiate into four models: ASIC manufacturer self-mining, modular (temporary) mining, intermittent (grid-balanced) mining, and sovereign nation mining. In the long run, computing power will be dominated by sovereign nations and ASIC manufacturers.

Crypto VC Funding: Where is the Money Going?

Jérémy Le Bescont – Chief Content Manager

Overall, 2025 marks the return of crypto assets to the VC investment logic, ending a period of near stagnation or even depression that had lasted for nearly two years.

In 2023, total funding in the crypto space reached $11.53 billion, a significant decrease from $34.9 billion the previous year. While the digital asset industry showed signs of recovery in 2024, funding still only reached $16.54 billion. By November 11, 2025, total funding for the year had already reached $18.8 billion, surpassing the total for 2024.

“This is the year with the most deals in the past three years,” Marguerite de Tavernost, a VC investor at Ledger Cathay, told us.

This growth also confirms the recovery of the overall trading environment – as of the third quarter of 2025, the global transaction volume had reached US$250.2 billion, exceeding the level of 2022-2024.

Concentration towards ultra-large-scale transactions

The most notable feature this year is the concentration of funds in mega-deals. Prediction market Polymarket reached a $2 billion strategic investment deal with ICE, followed by Stripe's $500 million investment in Layer-1 project Tempo and its $300 million investment in prediction market Kalshi.

These landmark funding rounds demonstrate a high concentration of capital in a single project. Similar trends are emerging in other sectors, particularly AI.

“In the past, we typically entered the market with a smaller amount and then gradually increased our holdings in subsequent rounds,” Marguerite de Tavernost continued—the €100 million fund has already invested in projects such as Flowdesk, Ether.fi, Crypto, and Midas. “Now, we are investing larger amounts of money at an even earlier stage.”

The main capital providers remain familiar names: Coinbase Ventures, Pantera, and Paradigm are particularly active in strategic rounds related to stablecoins, prediction markets, network layers, and DeFi applications.

In contrast, meme coins (excluding the standout Pump.fun) and NFTs have virtually disappeared this year, indicating market fatigue with these themes and the overall maturity of the industry.

Another noteworthy trend is the privacy sector: Canton Network completed a $135 million Series E funding round, followed by Mesh ($92 million) and Zama ($57 million) in Series B funding, becoming the most eye-catching case in this investment logic.

This theme is likely to continue if the U.S. government continues to pursue policies that favor crypto innovation, especially after Zcash (one of the earliest privacy coins) acquired a publicly traded treasury company controlled by the Winklevoss brothers.

Macroeconomic Background: The Connection to Liquidity

Before discussing 2026, it is crucial to understand the macroeconomic context shaping the recovery in 2025. Crypto VC funding is highly correlated with changes in the global liquidity environment, primarily driven by central banks.

While not always a one-to-one correspondence, our data consistently shows that crypto VC is a manifestation of "high beta" in the macro liquidity cycle.

During the tightening phase, particularly in 2022-2023, higher policy interest rates, rising real yields, and quantitative tightening significantly suppressed market risk appetite. Venture capital, which relies on long-term capital and typically lacks short-term cash flow, was the first to be affected.

Crypto VC activity dropped from a high of over $5 billion per month in 2021–2022 to well below $1 billion for the whole of 2023.

As financial conditions began to ease at the end of 2023, risk sentiment gradually improved. The Federal Reserve paused interest rate hikes, inflation subsided, and the market began to price in expectations of rate cuts. These changes drove a gradual recovery in global liquidity, echoing the recovery in crypto VC funding in 2024–2025.

While liquidity remains the most crucial driver, Bitcoin price movements, regulatory developments, and emerging themes such as RWA, Lightning Network-based infrastructure, and stablecoin settlement layers will also influence short-term dynamics. However, the overall pattern is very clear:

Crypto VC funding accelerates when liquidity expands and declines when liquidity tightens. This highlights the nature of crypto VC as one of the purest manifestations of the global monetary environment.

Therefore, liquidity is unlikely to become a bottleneck in 2026, and the favorable macroeconomic conditions supporting the recovery in 2025 seem likely to continue.

Furthermore, unlike traditional funds, crypto funds are typically able to provide DPI to LPs earlier, thanks to the high liquidity and rapid monetization capabilities of their tokens. If the Federal Reserve maintains its accommodative stance and the global liquidity environment remains favorable, 2026 is expected to see even stronger fundraising performance compared to 2025.

“Overall, market sentiment in the U.S. is very positive against the backdrop of the Trump administration’s push for pro-crypto policies,” confirmed an investor at Ledger Cathay.

Even in a scenario where liquidity tightens again, our investment strategy may not be affected. Jonathan King, Senior Manager at Coinbase Ventures, added: “We invest in all market cycles. When market sentiment is more optimistic, the number of projects increases significantly; but some of our best investments have actually been made when the market slows down and becomes quiet. Depending on the cycle, funding rounds may take longer to finalize, but overall, our doors are always open.”

Four key trends to watch in 2026

Having clarified the aforementioned macroeconomic background, four areas are particularly worth watching in 2026: the combination of AI and crypto, RWA (Real World Assets), Bitcoin infrastructure, and investment platforms for retail investors.

RWA (Real World Assets)

First, the tokenization sector will undoubtedly continue to expand next year. Republic's investment in Centrifuge, stablecoin startup Agora's Series A funding round (led by Paradigm and Dragonfly, raising $50 million), and the particularly noteworthy announcement regarding the Securitize SPAC listing have all attracted market attention and confirmed the strong interest of well-funded investors (including banks such as JPMorgan Chase, Clearstream, UBS, and Société Générale) in digitizing real-world assets.

In this vertical sector, stablecoins have once again become the most dominant segment:

"If you look at stablecoins, their market capitalization has grown by 50% year-on-year. It is predicted that it will become a $2 trillion asset in the next few years."

We have done a lot of work at the infrastructure level, from B2B cross-border payments and localized stablecoins (such as India’s p2p.me) to stablecoin networks like Sphere (Editor’s note: a gateway for deposits and withdrawals for cross-border payments).

“This extends further to on-chain lending and new forms of financing. Stablecoins will continue to be a flagship focus of Coinbase Ventures and Coinbase’s overall strategy,” Jonathan King explained.

It is worth noting that this area may intensify competition between different jurisdictions. MiCAR gives Europe a first-mover advantage in the implementation of tokenization, and its rules have been formally implemented throughout the European Economic Area (EEA); while the GENIUS Act in the United States, although recently passed, is still in the implementation phase.

AI connected with encryption

Over the past two years, public blockchains and applications connecting encryption and AI have emerged, covering areas such as resource consumption pricing and monetization, payment automation, user authentication, and the autonomous operation of AI agents. According to VCs, this trend is accelerating significantly.

“Previously, we mainly focused on the underlying infrastructure of crypto and AI. Next year, we hope to see more consumer-grade AI applications built on top of crypto. For example, new DeFi interfaces that integrate natural language trading and operations, and intelligent agents that are gradually acquiring asset management capabilities and acting like wealth management advisors,” Jonathan King explained.

Marguerite de Tavernost added, "This is an area we didn't originally plan to focus on investing in, but we did end up making two investments related to AI and blockchain."

Investment platforms targeting retail investors

One factor that could impact VC activity next year is the rise of native crypto consumer investment apps, most notably Echo and Legion.

Founded by renowned crypto figure Jordan "Cobie" Fish, Echo was acquired by Coinbase for $375 million in October 2025, drawing widespread attention. The platform's core lies in decentralized angel investment: through a whitelist curator mechanism, it opens up equity financing and ICOs to users, essentially functioning as a "native on-chain VC fund."

Among the more prominent examples, Layer-2 projects MegaEth and Plasma raised $10 million and $50 million respectively last year.

Its competitor, Legion, partnered with crypto exchange Kraken to launch a new platform for public offerings. Meanwhile, MetaDAO (backed by 6MV, Paradigm, and Variant) launched a fundraising platform on Solana with on-chain governance mechanisms to prevent defaults, and has completed eight oversubscribed ICOs to date.

After years of liquidity drought, these platforms have naturally become popular as new financing channels and have begun to compete directly with early-stage VCs.

Bitcoin infrastructure

Finally, venture capitalists' interest in Bitcoin-related fields is heating up. This is somewhat ironic, as Bitcoin, as the most important digital asset, has long been overlooked.

Because it is impossible to issue tokens "out of thin air," the Bitcoin ecosystem, apart from the mining industry, has never been the preferred direction for LPs, although mining continues to attract a lot of funds (for example, Auradine's $153 million Series C funding round completed in April 2025).

With the early funding success of Bitcoin Layer-2 projects, including Arch Labs (a $13 million round led by Pantera), BoB (Build on Bitcoin, a joint investment by Coinbase Ventures and Ledger Cathay), and BitcoinOS (which completed a $10 million funding round in October 2025), market focus seems to be shifting towards investment logics that are more tangible and directly enhance the utility of Bitcoin, rather than issuing new tokens on top of it.

This is quite similar to the case of Lightspark:

“Two years ago, the market was very focused on Bitcoin L2. Now, we are seeing a renewed focus on expanding Bitcoin’s utility, especially its security properties, and building new markets on top of that,” Jonathan King noted.

A shift in investment logic from high speculation to high practicality.

The changes over the past few months and the outlook for next year indicate that funds are increasingly seeking projects that can impact existing financial infrastructure and provide "basic building blocks" for new systems, while gradually moving away from tokens and public chains that are merely concepts and lack practical value.

Ethereum Layer-2 is no longer the focus of market attention, and general-purpose Layer-1 is also cooling down. The frequency of mentions of terms such as "Web3" and "NFT" is also declining.

Of course, every cycle is accompanied by some mini-bubbles, and the number of stablecoin companies that will ultimately survive this round remains to be seen. But overall, an era where cash flow and/or real utility are the core priorities is clearly more promising.

The Rise of Polymarkets

Luke Nolan – Senior Research Assistant

Although the concept of prediction markets has been around for nearly five years, its real use and popularity have mainly occurred in the past two years, with the 2024 US presidential election being the most powerful catalyst.

Platforms like Polymarket have grown from niche products in the crypto space into mainstream sources of real-time sentiment and even "facts," attracting a large number of users who don't care about crypto itself but simply want cleaner signals than news media or social media platforms.

About 18 months ago, we wrote an article discussing Polymarket. At the time, we judged that it might remain a niche product for hobbyists, with stable but limited usage. This assessment proved to be overly conservative. Since then, Polymarket's mobility and cultural influence have reached almost unprecedented heights.

During the 2024 US election cycle, markets related to the presidential and congressional elections often saw weekly trading volumes exceeding $800 million, and remained consistently high, often surpassing traditional betting platforms and even some polling aggregation platforms in terms of public attention.

Continued activity following the US election

Some observers believed that market activity would decline rapidly after the election as public attention shifted. However, this was not the case.

Trading volume remains strong, and open interest remains well above pre-election levels, suggesting that the market may have crossed a "tipping point" and is no longer a one-off event but has entered a long-term phase.

More important than activity level is accuracy. The essence of prediction markets lies in aggregating scattered information into a single probability, while financial incentives compel participants to get as close as possible to the true outcome. The charts in the text illustrate the comparison between Polymarket odds and actual results at different points in time.

The interpretation is not complicated. For example, an event priced in the 60% range has about a 60% probability of ending in "yes"; an event priced in the 80% range has about a 77%–82% probability of ending, depending on the number of hours remaining before the deadline.

In other words, Polymarket behaves like a well-calibrated predictive system; when the market gives an 80% probability of something happening, it usually does. This is exactly how a system where "mistakes have a monetary cost" should perform.

Prediction markets are beginning to be adopted by institutions

This accuracy and liquidity have not been overlooked. In October 2025, the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, made a strategic investment in Polymarket (up to $2 billion), which is equivalent to one of the most traditional and core institutions in the global financial system casting a vote of confidence in the prediction market.

Meanwhile, Polymarket's compliance competitor in the United States, Kalshi, is also expanding its influence through integration with brokerage platforms, media partners, and data providers, creating a competitive landscape that drives the entire sector forward.

These integrations reveal a crucial fact: prediction markets are not merely trading venues for speculators to make a little extra money; they are being integrated into a broader information infrastructure. Many people who never place orders still check Polymarket because the probabilities it provides are "cleaner" than news headlines.

For traders, the appeal is equally clear. There's no house advantage here; the platform only charges a small fee on profitable trades, meaning that statistically, long-term profitability is possible. In contrast, in traditional betting companies, the odds design itself guarantees the platform's profit.

All these factors point to a simple conclusion—the forecasting market is likely to continue to grow because it addresses the needs of multiple groups simultaneously:

Traders gain access to an efficient market, bystanders gain access to "real signals," institutions gain access to almost free sociological or economic research data (presented in probabilistic form), and the platforms themselves become more powerful as they grow in scale; the deeper the liquidity, the more accurate the predictions.

The trajectory of the past two years suggests that Polymarket is gradually becoming a way for people to understand the world. With the launch of builder code, we expect Polymarket's weekly transaction volume to reach a new high in 2026, and even break through $2 billion in a single week.

Mining after HPC: What's next?

Alexandre Schmidt – Index Fund Manager

For a long time, Bitcoin mining companies have been one of the core channels for gaining exposure to blockchain and crypto assets through listed stocks. After a period of investment and expansion, and reaching industrial-scale mining, this market has shifted again.

In 2024, several mining companies announced plans to transform into the fields of AI and HPC (high-performance computing); and by 2025, most mining companies were already fully promoting the construction of their HPC data centers.

This article attempts to answer two questions: Why did this transformation occur? And where will the mining industry go next, given the cessation of building new large-scale industrial-grade mining facilities?

2025: Industry-wide Expansion

In 2025, Bitcoin mining companies demonstrated strong growth momentum. In the nine months ending in September, the total hashrate of listed mining companies increased by approximately 110 EH/s, compared to only about 70 EH/s in the same period of 2024.

Although these figures seem to contradict the statement that mining companies are "downgrading mining and turning to building HPC facilities," the reason is that these companies actually placed multiple large orders with ASIC manufacturers in 2024, and the relevant equipment was delivered in 2025.

Half of this year’s computing power growth came from three companies: Bitdeer (+26.3 EH/s), HIVE Digital (+16 EH/s), and Iris Energy (IREN) (+15 EH/s).

HPC's transformation is beginning to take effect.

In addition to the considerable increase in computing power, the shift to HPC has finally been reflected in actual contracts and revenue this year.

For Bitcoin mining companies, building and upgrading facilities to handle HPC loads is highly attractive: it not only allows for business diversification and access to a more stable, predictable revenue stream with approximately three times the profit margin per megawatt (MW), but also enables them to participate in multi-billion dollar deals announced by hyperscalers and semiconductor companies.

As of the end of October 2025, mining companies had announced contracts totaling approximately $65 billion with hyperscalers and new cloud service providers (neoclouds).

These announcements significantly boosted the stock prices of the companies involved. These contracts will fundamentally change the business structure of these companies: on the one hand, alleviating the pressure from the continued growth of Bitcoin's total network hashrate, and on the other hand, significantly improving their profit margins (most companies expect these contracts to bring in 80%–90% operating profit margins).

Therefore, among the six companies that have announced HPC contracts, we expect Bitcoin mining revenue to account for less than 20% of total revenue, down from about 85% in early 2025.

Looking ahead to 2026

First and foremost, it needs to be made clear that mining companies are still mining companies.

Most companies that have shifted to HPC still derive the vast majority of their revenue and cash flow from Bitcoin mining.

In the foreseeable future, HPC will be more of an incremental supplement to existing businesses than a direct replacement for Bitcoin mining capacity, although we do expect these companies to gradually and slowly exit some mining operations as new contracts are signed and electricity capacity demand increases.

Even by 2026, a few mining companies may still continue to increase their mining hashrate. According to communications with management, CleanSpark stated that its mining business still has the option to increase by approximately 10 EH/s; while Canaan recently announced a deal for 50,000 mining machines, indicating that other mining companies may also be significantly expanding their mining scale.

Looking at a longer timeframe, Bitcoin mining is likely to take a very different form from its current operating model, potentially including the following:

ASIC manufacturers: ASIC manufacturers are most likely to continue mining at near- or industrial-scale levels. To retain their capacity quotas at wafer foundries (especially TSMC), manufacturers must place minimum order quantities. If these mining machines fail to sell, they will likely be deployed in the ASIC manufacturers' own mining farms.

In addition, ASIC manufacturers can design and manufacture ASICs specifically for their own use at significantly lower costs, thereby supporting larger-scale mining operations.

Modular mining: Some companies are proposing a model that introduces temporary, mobile mining modules into sites being developed for other uses. Once the power infrastructure is in place, these modules can be connected and begin mining, continuing to operate until the power enclosure is completed and the site is officially leased out.

Intermittent mining: This is an alternative model that can coexist with HPC: mining facilities are built in parallel with HPC, but only operate when electricity prices are close to zero, thus helping to balance grid load. In this case, mining companies are more likely to use old, fully depreciated equipment because its load factor is usually very low.

Sovereign Entities (Nations): We believe that sovereign states have already captured a significant amount of non-public mining computing power. The motivations for states to participate in mining are diverse, including obtaining foreign exchange, monetizing electricity resources, and direct access to the Bitcoin network. Given the advantages of sovereign states in terms of financial strength and resource acquisition, we believe that state-level mining will remain at an industrial scale for the foreseeable future.

Which of the above models will ultimately prevail will depend on the Bitcoin network's own incentive mechanisms and the sensitivity of various participants to the economics of mining.

Our assessment is that in the medium term, sovereign states and ASIC manufacturers will dominate the distribution of computing power; while in the longer term, mining may return to a smaller, more decentralized form, relying on cheap "stranded electricity," and most likely primarily from renewable energy sources.