Author: Nikka / WolfDAO ( X : @10xWolfdao )
Foreword
If I had to sum up the crypto market at the start of 2026 in one word, I would say: misalignment .
Prices are falling, but the structure is being rewritten. The narrative hasn't disappeared; it's just shifted to where retail investors pay the least attention.
The purpose of this summary before the Lunar New Year is not to predict whether the market will rise or fall after the holiday, but to answer the question: What is actually happening in this market?
I. The Transformation of BTC: From Safe-Haven Asset to High-Beta Risk Asset
In late January, Bitcoin, gold, and silver were all sold off simultaneously. This phenomenon almost shattered the narrative of "digital gold." When liquidity tightened, Bitcoin did not exhibit any hedging properties; instead, it was prioritized for selling during the deleveraging process.
In a real asset allocation system, BTC is not a safe-haven asset, but a high-beta risk asset.
From 2025 to 2026, BTC will not experience price fluctuations, but rather a shift in its identity. It will still be labeled "digital gold," but it has already been categorized as a "tech stock plus." In times of crisis: no hedging, no independence, and you'll be the first to be sold off.
ETFs were supposed to be a milestone, with many expecting them to provide a "stabilizer." But in reality, ETFs bring not stability, but resonance. Traditional institutions buy BTC ETFs because of portfolio allocation needs, not out of faith. This motivation means they will sell without hesitation when risk appetite reverses.
ETFs make it easier to buy BTC, but also easier to sell off in tandem. Liquidity appears to increase, but in reality, it's being centralized. Pricing power shifts from believers to risk management models.
BTC hasn't weakened; it's just been put into the wrong asset basket.
Second, stablecoins are no longer just "crypto tools," but rather financial infrastructure.
If Bitcoin is experiencing a period of identity confusion, stablecoins have found a defined role. This may be the most important, yet most easily overlooked, change at the start of 2026.
Stablecoins are undergoing a quiet transformation. In the past, they were trading pairs, units of account, and sources of liquidity. Now they are becoming something entirely different.
Visa and Mastercard are pushing for on-chain clearing not because they believe in decentralization, but because stablecoins offer a more efficient payment track. Banks are piloting tokenized deposits not to play around with Web3, but to secure a place in the next generation of financial infrastructure.
Stablecoins no longer serve transactions, but rather payments, settlements, cross-border transactions, and custody. They are no longer internal tools of the crypto market, but rather a bridge connecting traditional finance and the digital world.
2026 may be the year that stablecoins move from being "peripheral market tools" to becoming "mainstream financial channels".
The competitive landscape has shifted. Previously, it was about "who has the largest market capitalization," but now it's about "who can pass regulatory scrutiny," "who can be integrated into payment systems," and "who can enter enterprise scenarios." USDT offers liquidity, but compliance remains a significant challenge. USDC, prioritizing compliance, has become the preferred choice for institutions.
This seemingly calm track is actually the front line of the redistribution of financial power. Whoever controls the payment system controls the future gateway to finance.
III. The "De-casinoization" Trend in Crypto Exchage
Leading centralized exchanges (CEXs) are listing precious metals and commodity contracts, while Hyperliquid is offering forex and stock indices. CEXs/decentralized exchanges (DEXs) are increasingly resembling multi-asset brokers. Behind this shift lies a cold, hard business judgment: crypto asset trading volume is unlikely to sustain growth indefinitely.
The Meme coin frenzy is getting shorter and shorter, and the quarterly returns on Alt coins are getting thinner and thinner. Exchanges must choose: wait for the bull market (passive) or expand their assets (active)? Leading platforms have chosen the latter.
This isn't because crypto assets are favored, but because crypto users are favored . These users are accustomed to 24/7 trading, high leverage, and quick entry and exit. These behavioral characteristics can be transferred to other assets. When users lose interest in crypto, the platform doesn't let them leave, but instead offers gold, forex, and stock indices.
In terms of revenue, traditional asset trading is more stable and predictable. Platforms need to find new revenue pillars outside of bull markets.
The casinos are gone, but the users remain; the platform must transform.
The risks haven't disappeared; they've just changed their packaging. This is especially true when a platform is simultaneously an exchange, a brokerage, and potentially a market maker.
IV. Copy Trading and the Collective Illusion of "Pseudo-Professionalism"
If any sector remains active in early 2026, it will undoubtedly be copy trading. This activity is worth examining before the end of the year.
The logic of copy trading seems appealing: outsource decision-making, replicate expert strategies, and save time and effort. But this system has a fatal flaw: you only see living, breathing people .
Accounts that suffer margin calls are delisted, those that are lucky enough to be featured on the homepage, and those that avoid black swan events show the most impressive returns. The profiles of those providing trading guidance are converging: high turnover, aggressive position averaging, Martingale strategies, and survivorship bias. Platform incentives are creating a "fake Sharpe"—appearing high risk-adjusted returns, but in reality, they are merely postponing tail risks.
From 2025 to 2026, copy trading shifted from "copying expert trades" to "copying the path to account wipeout." Early on, profits might be made due to a one-sided market uptrend. However, during sideways or volatile periods, the problems with aggressive strategies became apparent: high turnover eroded profits, and aggressive position sizing could lead to a wipeout in the opposite direction, making the Martingale strategy increasingly risky.
More importantly, copy trading creates a false sense of "professionalism." Participants believe the risk has been absorbed, when in reality it has only been postponed, diversified, and packaged. While it appears to be "copying," it's essentially still betting on the market, only the decision-making power has been given to someone else. And this person's advantage might simply be luck, or simply not yet encountering an environment that would render them ineffective.
You think you're copying homework, but you're actually copying the marks on the answer sheet.
When the market reverses, those who follow the trades will collectively discover that what they copied was not "ability," but rather "unproven strategies" and "risks that have not yet been triggered."
The real key word isn't "bullish/bearish," but rather "correlation."
Connecting the preceding topics reveals a common underlying logic: at the start of 2026, the most significant characteristic of the crypto market is not direction, but synchronization.
The correlation between BTC and Nasdaq is near historical highs, altcoins are showing highly homogeneous price movements, stablecoin yields are linked to US Treasury yields, and on-chain activity is synchronized with macro liquidity. Traditional "diversification" has largely failed. You might think holding 10 coins diversifies risk, but you're actually just holding 10 different packages of the same risk.
Judging the direction becomes relatively simple, but bearing the risk of simultaneous errors becomes exceptionally difficult. You might be bullish on BTC, ETH, and DeFi, but a single hawkish speech from the Federal Reserve can render your judgments invalid simultaneously. With all positions losing money at the same time, "diversification" offers absolutely no protection.
Macroeconomic variables have become a "one-click repricing" switch. The crypto market once enjoyed independent price movements, but with the influx of institutional funds and the inclusion of ETFs in the traditional system, this independence is disappearing. Crypto assets are increasingly resembling high-beta varieties within a basket of risky assets, rather than independent asset classes.
The biggest risk this year is not going in the wrong direction, but that all assets are right at the same time.
In a highly correlated environment, risk cannot be reduced by diversification within the crypto market because the entire market will be affected by the same macroeconomic factors.
This explains why the start of 2026 was confusing: it wasn't that there were no opportunities, but rather that the old investment framework was no longer applicable. The past rhythm of "BTC rises, Alt follows suit, and some individual stocks explode" has been broken. Now it's "good macro environment, everything rises," and "tight liquidity, everything falls." The fundamentals and narratives of individual projects become less important in the face of overall macroeconomic fluctuations.
Year-end summary: The story has changed protagonists, but you're still waiting for the old script.
Let's go back to the word at the beginning: misalignment .
The crypto market in 2026 isn't without its stories; rather, the protagonists have changed. The focus has shifted from price to structure, from narrative to channels, from faith to allocation, and from retail investors to institutions. These changes are happening quietly, while most are still watching candlestick charts waiting for the "next wave."
These changes all point to one conclusion: the opportunities in the next phase may not lie in "whether prices have risen or not," but in "who is still on the table and how long they intend to stay."
For those still navigating old maps, the end of the year is a time to pause and reassess. When prices will rebound, where the next 100x coin will be, and when the bull market will arrive—these may no longer be the most important questions. What's more crucial is: Where do you stand in this new market structure? What are your strengths? And for what time horizon are you preparing?
For those who have already realized that the market is changing, the end of the year is a time to reorganize their thinking and adjust their strategies. The opportunity lies not in predicting the next price high, but in understanding the new rules, finding a new position, and adapting to the new environment.
The market hasn't stagnated; it's just stopped telling stories around prices. The stories have shifted to areas that take time to emerge: structure, channels, roles, and power. And these stories often go unnoticed until they truly impact prices.
Looking back after the New Year, perhaps everything will be clearer. We might discover that the seemingly uneventful start to 2026 is actually a significant turning point. However, we often fail to realize its significance at the moment of the turning point.
Happy Chinese New Year. Stay observant, stay skeptical, stay flexible.
