21Shares cuts 2026 forecasts as institutional adoption lags price recovery

21Shares has trimmed several of its 2026 crypto forecasts, saying institutional adoption has grown even as weaker prices and slower enterprise adoption delayed parts of the industry's recovery.

The asset manager's midyear outlook said the digital asset industry has continued building stronger infrastructure despite a difficult market environment. Progress in areas including exchange-traded funds, stablecoin regulation, tokenization, and prediction markets has exceeded what recent price action suggests, the firm said. Weaker crypto prices, major decentralized finance exploits, and slower enterprise adoption prompted the firm to reduce several expectations it had set earlier this year.

Institutional participation has increased without changing Bitcoin's long-established market structure, the report argues. Bitcoin reached roughly $126,000 in October 2025 before entering a decline that has largely followed historical post-halving patterns, according to 21Shares. Larger institutional ownership has reduced the severity of drawdowns. The four-year market cycle remains intact, the firm said.

Former 21Shares co-founder Ophelia Snyder, who left the company after its acquisition by FalconX in 2025, expressed a similar view in a Substack post. Snyder wrote that crypto's investor base has become more institutional and increasingly tied to the wider financial system, making prices more responsive to macroeconomic developments, geopolitical events, and competing investment narratives.

Prediction markets were among the strongest-performing segments. 21Shares expects annual trading volume in prediction markets to exceed $100 billion this year.

The report identified consolidation as an accelerating trend across crypto markets. Several publicly listed companies that hold digital assets on their balance sheets are trading below the value of their crypto holdings, increasing the likelihood of mergers or acquisitions among smaller treasury firms, according to 21Shares.

A comparable pattern is developing within Ethereum's layer-2 ecosystem. A small number of leading rollups continue to capture users and liquidity. Many smaller networks have struggled to build meaningful activity, the report said.

Crypto investment products have continued attracting institutional capital despite recent market weakness. U.S. spot Bitcoin exchange-traded funds have recorded about $3 billion in net outflows this year. 21Shares said ETF holdings remain above 1.25 million BTC, close to a record high. The firm argued these figures indicate many investors have maintained or quietly increased positions instead of exiting the market during the downturn.

Recent market volatility has weighed on sentiment. A stronger-than-expected U.S. PCE inflation reading renewed concerns that the Federal Reserve could keep monetary policy tighter for longer, triggering nearly $1.5 billion in crypto liquidations and pushing Bitcoin, major altcoins, and crypto-related equities lower, as crypto.news reported.

Bank of America earlier this week revised its outlook to forecast three 25-basis-point Federal Reserve rate hikes this year, citing persistent inflation risks.

Some institutions have maintained their longer-term outlook despite the latest selloff. Standard Chartered's Geoffrey Kendrick reiterated the bank's $100,000 Bitcoin and $4,000 Ethereum targets after an earlier market decline, as crypto.news reported in June. Kendrick argued at the time that Bitcoin's drop toward $59,000 likely represented the cycle low. Stronger ETF flows and institutional demand remained key conditions supporting the bank's longer-term price targets, he said.

21Shares said improving regulatory clarity in the U.S. continues to support product launches. The firm pointed to the Securities and Exchange Commission's generic listing standards, which have accelerated approvals beyond Bitcoin and Ether products. Hyperliquid was highlighted as one example. U.S. spot ETFs tracking the asset gathered more than $150 million in net inflows within their first month, signalling continued institutional interest in digital assets.