Crypto Market Enters Infrastructure Phase: 2026 Outlook Shows Institutional Pivot Toward Utility

Source: CryptoTale Original Title: Coinbase Institutional Says Crypto Market Is in 1996 Phase Original Link: https://cryptotale.org/coinbase-institutional-says-crypto-market-is-in-1996-phase/ A major institutional research team released its 2026 crypto market outlook this week, comparing current market conditions to 1996 rather than a late-cycle bubble peak. The report details how regulatory progress, institutional behavior shifts, and infrastructure demand are reshaping the crypto landscape.

Institutions Move From Passive Holdings to Infrastructure Participation

2026 is framed as a transition year driven by institutional participation at the infrastructure level. Large firms are moving beyond passive holdings into trading, custody, and block space procurement. This shift reflects what the report calls a “DAT 2.0” model—where institutions treat sovereign block space as a strategic commodity, planning storage, execution, and settlement together.

This transformation depends heavily on regulatory clarity. Global regulatory frameworks are advancing, with specific progress in the United States on stablecoin legislation and broader crypto market structure bills. These regulatory steps reduce uncertainty that previously limited institutional engagement and support compliance planning, portfolio construction, and long-term risk management.

As regulation advances, institutions are also adjusting token strategies toward “Tokenomics 2.0,” emphasizing revenue-linked value capture rather than narrative-driven models.

Technology Shifts Toward Compliance-Aware Privacy and AI Integration

Several technologies are gaining traction as institutions scale their involvement:

Privacy Infrastructure: On-chain privacy demand continues rising, with increased development of zero-knowledge proofs and fully homomorphic encryption. These tools support compliance-aware privacy rather than anonymity, showing measurable growth in institutional adoption.

AI and Programmable Settlement: AI-driven systems now require programmable settlement layers. Protocols supporting autonomous microtransactions and service governance allow AI agents to transact, secure services, and manage on-chain operations, making crypto functional infrastructure for automated economic activity.

Application-Specific Chains: Application-specific chains continue expanding, optimizing performance for finance, gaming, or data services. Rather than endless fragmentation, a network-of-networks model is emerging, defined by native interoperability and shared security.

Tokenized Assets: Tokenization offers atomic composability benefits, with DeFi-style loan-to-value ratios already exceeding traditional margin frameworks in many cases.

Market Maturation: Lower Volatility, Broader Integration

Bitcoin’s 90-day volatility fell to 35-40% by late 2025, down from over 60% in mid-2024. This moderation came alongside spot Bitcoin ETF approvals and launches, and volatility now resembles high-growth technology stocks—signaling structural adoption rather than reduced market stress.

The report forecasts a stablecoin market cap near $1.2 trillion by 2028, driven by payments, payroll, settlement, and cross-border remittances. Prediction markets, crypto derivatives, and potential U.S. tax policy changes are expected to further push crypto toward the financial core.

The 1996 Parallel: Early Infrastructure Phase

The outlook frames 2026 as an early-internet-style build phase rather than speculative excess. Crypto is presented as infrastructure taking shape, supported by regulation, technological specialization, and institutional participation. This marks a fundamental shift from a speculative asset class to functional financial infrastructure.