The metapora of the 2026 crypto market: from "Year One" to the turning point of "Year Two"

2026 is becoming a pivotal metapora moment for the cryptocurrency industry — transitioning from the initial campus adaptation phase to a stage requiring true specialization, institutionalization, and deep development. This metaphor is especially important for understanding current market dynamics, as crypto assets move from the fringes to the mainstream, facing no longer survival issues but rather how to achieve sustainable growth within an institutional framework.

Tokenization Revolution and 24-Hour Capital Markets: The Critical Moment of 2026

Traditional capital markets have operated under a model that has lasted for decades: prices driven by liquidity discovery, forming trading frameworks through batch settlement and collateral management. But this model is being broken.

According to David Mercer, CEO of LMAX Group, 2026 will mark an inflection point — when continuous 24-hour capital markets shift from a theoretical concept to a structural reality. As tokenization accelerates and settlement cycles shorten from days to seconds, this transformation is no longer optional but inevitable.

Market forecasts indicate that by 2033, the tokenized asset market size will reach $18.9 trillion, with a compound annual growth rate (CAGR) of up to 53%. While this number sounds aggressive, it is not impossible considering the historical evolution of technology — from electronic trading, algorithmic execution to real-time settlement, each step reducing market friction.

More importantly, Mercer predicts that by 2040, 80% of global assets could be tokenized. This follows a classic S-curve — just like mobile phones and air travel, moving from the edge to the mainstream is not linear but exponential.

From Capital Efficiency to the Depth of Change

Currently, institutional investors need to prepare days in advance when deploying new assets. Transitioning to new asset classes requires coordination with collateral positioning and risk management processes, which can take 5 to 7 days. In T+2 or T+1 settlement cycles, capital is locked, creating liquidity bottlenecks in the system.

Tokenization changes all that. When collateral becomes interchangeable tokens and settlement shifts from days to seconds, institutions can continuously reconfigure their portfolios. Stocks, bonds, and digital assets become interchangeable parts of a unified, always-online investment tool.

What does this mean? The traditional “weekend closeout and Monday rebalancing” rhythm disappears. Market liquidity increases significantly as capital locked in old settlement cycles is released. Stablecoins and tokenized money market funds serve as connective tissues between different asset classes, enabling previously isolated markets to achieve instant liquidity. Trading volume rises, spreads narrow, settlement risks decrease — all driving a more efficient market.

Global Regulatory Breakthroughs: South Korea Lifting Restrictions vs UK Caution, Market Moving in Two Directions

Regulatory developments at the start of 2026 reveal a complex global landscape: some markets are making big strides forward, while others are setting up more safeguards.

The Gate of the East Opens

South Korea broke a nearly decade-long ban on corporate crypto investments this month. Now, listed companies can hold up to 5% of their equity capital in crypto assets, limited to mainstream tokens like BTC and ETH. This marks a genuine acceptance of institutional-grade crypto adoption by major Asian economies.

Meanwhile, Interactive Brokers (IBKR) — a giant in electronic trading — launched 24/7 USDC deposit functionality, allowing clients to instantly fund brokerage accounts. More notably, the platform plans to soon support Ripple’s RLUSD and PayPal’s PYUSD. This is not just technological progress but a substantive integration of traditional finance with digital assets.

The Cautious Stance of the West

In contrast, the US and UK are taking a more cautious approach. The US Senate Banking Committee faced setbacks in crypto legislation, with stablecoin yield issues becoming a contentious point between traditional banks and non-bank issuers.

UK lawmakers are further pushing to ban political donations in crypto, claiming it’s a necessary measure to prevent foreign interference.

This regulatory divergence itself is a metapora: if we compare the crypto market to a global campus, then different regions are writing their own “dorm rules.”

The “Second Year” Metapora: How the Crypto Market Will Survive the Youthful Test

Andy Baehr, Head of Product and Research at CoinDesk, uses a fitting metapora to describe what 2026 means for crypto: if 2025 is the “first year” (freshman year of college), then 2026 is the “second year” — no longer a honeymoon period, but the real test begins.

Report Card for the First Year

Looking back, the past year has been a rollercoaster for the crypto industry. Optimism after the Trump election pushed BTC to all-time highs. But subsequent tariff tantrums and market overheating led to corrections, with BTC falling below $80,000 and ETH dropping to $1,500. Although there was a rebound, Q4 performance was lackluster — a midterm exam of “auto deleveraging” that shook market confidence.

Current market data shows: BTC at $88.28K, down about 30% from its all-time high of $126.08K; ETH at $2.96K. These figures themselves are lessons.

What’s Needed to Avoid the “Second Year Slump”

Baehr points out that to avoid the well-known “sophomore slump,” the crypto market needs progress in three key areas:

Legislative and Regulatory Clarity: The CLARITY Act faces tough prospects, especially regarding stablecoins. The market needs to set aside disagreements, seek compromises, and push this critical legislation forward.

Building Mainstream Distribution Channels: The biggest challenge isn’t technology but distribution. Currently, the user base is mainly self-directed traders. Until crypto assets establish similar allocation incentives among retail, middle-income, high-net-worth, and institutional investors — just like other asset classes — institutional adoption will not translate into real performance gains. Financial products need to be sold to be used.

Focusing on Asset Quality: Data shows that over the past year, CoinDesk 20 (mainstream large-cap coins) outperformed CoinDesk 80 (mid-cap coins). This indicates the market favors larger, higher-quality digital assets. These 20 key names — currencies, smart contract platforms, DeFi protocols, critical infrastructure — offer enough diversification and new thematic exploration without cognitive overload.

Pudgy Penguins and the NFT Ecosystem: From Web3 Gaming to Mainstream Consumption

Beyond macro market trends, specific consumer applications are also demonstrating the evolution of crypto. Pudgy Penguins is becoming one of the most prominent NFT-native brands in this cycle, marking a shift from speculative “digital luxury goods” to a multi-vertical consumer IP platform.

Their strategy is noteworthy: first, acquire users through mainstream channels (toys, retail partnerships, viral media), then bring them into Web3 via gaming, NFTs, and PENGU tokens.

The ecosystem is already quite mature:

• Physical merchandise sales exceeding $13 million, with over 1 million units sold
• Pudgy Party game surpassed 500,000 downloads in two weeks
• PENGU tokens airdropped to over 6 million wallets

While the market currently values Pudgy relative to traditional IP peers at a premium, sustainable success depends on retail expansion, game adoption, and token utility execution. PENGU is currently priced at $0.01, reflecting early-stage project valuation.

The New Relationship Between BTC and Gold: The Market Signal Behind 0.40 Correlation

From a technical perspective, a new signal is worth noting: the 30-day rolling correlation shows that BTC and gold have first exhibited a positive correlation (0.40) in 2026, coinciding with gold reaching new highs.

This shift is interesting. It may indicate one of two phenomena:

• Bullish scenario: Gold rising provides moderate valuation support for BTC, suggesting both are viewed as hedging assets
• Bearish scenario: Continued weakness in BTC (weekly gains of -1%, still below the 50-week EMA) may be proving its decoupling from traditional safe-haven assets

The key current monitor is: whether ongoing gold appreciation will support BTC valuation, or whether BTC’s weakness will deepen its divergence from traditional safe assets.

Summary: 2026 as the True Turning Point for Crypto

To end with a metapora: if 2025 is the first academic year of crypto entering the campus — full of novelty, hope brought by political change, and initial adaptation — then 2026 is the stage where students need to choose their majors seriously.

Not everyone will pass the exam. The crypto market needs to prove it can not only survive in enthusiasm but also thrive within institutional, regulatory, and real-world application frameworks. Progress in tokenization, regulatory breakthroughs like South Korea, mainstream integration like Interactive Brokers, and consumer applications like Pudgy Penguins are not isolated events but different expressions of the same metapora: crypto evolving from the edge to the center, from experiment to system, from the first-year adaptation to the second-year specialization.

The readiness of institutional investors now will determine whether they can seize opportunities in this new paradigm.