Derivatives, not retail demand, now drive price discovery

The first key factor highlighted by Coinbase is the dominance of derivatives, particularly perpetual futures, in overall trading volume. Price formation is increasingly driven less by short-term retail activity and more by market positioning, funding rates, and liquidity conditions.

Following the large-scale liquidations at the end of 2025, the use of leverage has declined significantly. Coinbase views this as a structural market reset. Stricter margin requirements and improved risk management frameworks could, according to analysts, make the crypto market more resilient over the long term.

Prediction markets move beyond niche status

The report identifies the rise of prediction markets—including platforms such as Polymarket and Kalshi—as a second major trend. These platforms are gradually evolving from niche products into an established component of the financial ecosystem. Rising trading volumes and improving liquidity suggest they are increasingly used for information discovery and risk hedging.

At the same time, platform fragmentation is increasing demand for more transparent and efficient solutions, attracting professional investors and expanding usage well beyond traditional crypto traders. Greater regulatory clarity in several jurisdictions is also supporting this shift.

Stablecoins and payments emerge as the key growth driver for 2026

The third—and, according to Coinbase, most important growth area in 2026 will be stablecoins and payment applications. Transaction volumes in USDT, USDC, and other stablecoins are expanding primarily due to real-world settlements, cross-border transfers, and liquidity management.

Analysts place particular emphasis on the integration of stablecoins with automated trading systems and AI-driven applications. These technologies, they argue, strengthen the role of blockchain-based payments as a core infrastructure for digital markets.

What comes next for the crypto market

Whether these segments can sustain growth and effectively manage risk in a tighter market environment in 2026 will be a defining question for the industry. Coinbase believes these factors will shape the evolution of the crypto market well beyond the next price cycle, permanently altering the traditional four-year cycle model.