The cryptocurrency sector seems poised for an extended period of downturn, yet this cycle exhibits distinct characteristics compared to previous slumps, according to insights from Wall Street’s Cantor Fitzgerald.
In a recent year-end review, analyst Brett Knoblauch noted that Bitcoin, currently valued at $87,660.94, is likely entering what traders refer to as a “crypto winter.” Having peaked roughly 85 days ago, Knoblauch anticipates that selling pressure may persist for several more months. Prices might decline toward approximately $75,000—close to the average acquisition cost held by Strategy.
However, this decline diverges from earlier crashes in one key aspect. Knoblauch does not foresee the widespread panic selling or corporate failures typical of past market downturns. The primary reason is that institutional investors have now taken over as the dominant force influencing market dynamics instead of retail participants.
The underlying developments matter more than mere price movements at present. According to the analyst, sectors such as decentralized finance (DeFi), asset tokenization initiatives, and fundamental crypto infrastructure continue expanding despite falling token prices.
Tokenized Assets Reach $18.5 Billion—Tripling Their Previous Value
This year witnessed the total valuation of tokenized assets—including equities, credit instruments, and U.S. Treasury securities—surging to $18.5 billion; a threefold increase compared with prior figures. As financial institutions increasingly experiment with blockchain-based settlement technologies,Cantor Fitzgerald projects these values could exceed $50 billion in the near future.
Trading behaviors are evolving too: decentralized exchanges (DEXs), which allow peer-to-peer transactions without intermediaries,re gaining ground over conventional centralized crypto platforms.Cantor expects these DEXs will continue their growth trajectory even if overall trading volumes contract alongside Bitcoin’s price declines projected into 2026.The efficiency and user-friendliness of perpetual futures contracts on these platforms contribute significantly to this trend.
A major catalyst behind these shifts is regulatory reform emanating from Washington.Dubbed the Digital Asset Market Clarity Act (CLARITY), recently enacted legislation clarifies when digital assets qualify as commodities rather than securities.Furthermore,it empowersthe Commodity Futures Trading Commission(CFTC)to oversee spot cryptocurrency markets once specific decentralization criteria are met.
Clear legal frameworks reduce unexpected regulatory shocks that can unsettle markets.This clarity enables investment firms and banks to participate with increased confidence.Moreover,the rules provide compliant decentralized platforms with guidance—a crucial factor given compliance has historically been a significant hurdle within this space.
Sports Betting Markets Experience Explosive Growth Surpassing $5.9 Billion
Cantor also highlighted remarkable progress in online prediction markets,specifically within sports betting.In Q3 alone,DraftKings accounted for over halfof more than$5.9 billionin transaction volume.Unlike traditional sportsbooks,new entrants like Robinhood,Coinbase,and Gemini have introduced fairer systems leveraging order book mechanisms into this arena.
Nonetheless,the outlook carries some risks.Bitcoin currently trades only about 17% above Strategy’s average purchase price.A dip belowthis level could undermine investor sentiment,even though Cantor doubts any substantial liquidation by Strategy.Digital asset trusts have likewise tempered their acquisitions amid narrowing premiums and declining prices.
A rapid surge in cryptocurrency adoption next year appears improbable.Despite falling valuations,the ongoing developmentof robust infrastructure coupledwith heightened involvementfrom major institutions suggestsa stronger foundationthan seen previouslywithinthe industry.