Welcome and Happy New Year! Crypto wasted no time showing markets what 2026 might look like. Bitcoin started January with a strong rally, trading activity surged, and risk assets briefly returned to favour before the market cooled again. Beneath the sharp price moves, a bigger shift is taking shape. Money is moving more selectively, large institutions are playing a bigger role through ETFs and balance sheets, banks are pushing further into crypto products, and regulators are reshaping the rules.
From XRP’s early breakout and growing interest from Wall Street, to miners selling bitcoin to fund AI projects and index providers rethinking how digital asset treasuries are treated, the opening weeks of 2026 are already setting the tone. While prices may swing day to day, these early signals point to the themes likely to shape crypto for the rest of the year.
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Crypto Starts 2026 With A Rally
Bitcoin briefly touched US$93,000 (AU$138,341) before moving above US$94,000 (AUD$139,828) on Monday as traders rotated back into risk assets at the start of the year. As of Tuesday, Bitcoin was up around 1% over 24 hours and roughly 3% over the past week, while Ethereum held near US$3,160 (AU$4,701), also trading higher on the day, the highest price since November 2025. Presto Research analyst Min Jung, cited by The Block, noted that the first week of the year often brings fresh positioning, with Bitcoin increasingly viewed as an attractive entry point relative to other assets trading near record highs.
The rally was amplified by heavy derivatives activity, with more than US$260 million (AU387 million) in liquidations over 24 hours, including roughly US$200 million (AU$297 million) from short positions. In a four-hour window alone, over 121 million USD (AU$180 million) in shorts were wiped out, compared with less than 9 million USD (AU$13 million) in long liquidations. According to The Block, a separate spike saw more than US$140 million (AU$208 million) in liquidations over four hours as bearish bets were forced out. The strong start to the week in crypto coincided with broader risk and moves across global markets, led by AI momentum in Asian equities and surges in silver and gold.
However, in our current timeline of world-altering events happening every other day, consistency is a valuable trait (well, to me). And in true consistent crypto fashion, the rally has since paused. In true crypto volatility style, following an early-2026 surge of more than 8% that briefly pushed prices toward US$94,700 (AU$140,000). BITCOIN.com attributes the move to profit-taking rather than a trend reversal. Markets are increasingly focused on a January 9 U.S. Supreme Court ruling on President Donald Trump's global tariffs, whilst FX Street is citing geopolitical tensions between the U.S. vs China, China vs Japan, the U.S. vs Venezuela, the U.S. vs Greenland, amongst other geopolitical tustles right now or the market's sudden cooldown.
XRP Stands Out
XRP has started 2026 strongly, with CNBC calling it the hottest crypto trade of the year after a sharp January rally of more than 20%. CryptoNews.com reports that the token has outperformed Bitcoin and Ether and moved past Binance’s BNB by market value, standing out as much of the broader crypto market has cooled. CNBC analysts said XRP attracted investors late in 2025 as a less crowded trade, with buyers adding exposure through XRP-focused investment products even as interest in Bitcoin and Ether softened.
XRP’s momentum has been supported by steady inflows into XRP investment products, with five launched in the last week. XRP is going from strength to strength with the resolution of its SEC case and real use cases cited by the US White House and the United Nations alike. XRP’s role in cross-border payments, where it is positioned as a bridge asset that can quickly move value between currencies, has also strengthened its appeal as institutional investors flock to cryptocurrency neobanks. Whether this rally continues, who's to say? However, in the same CNBC segment that lauded the token as the breakout coin of 2026, analyst Dom warned that this rally is held together by thin sell-side liquidity rather than strong underlying demand, suggesting its sustainability is questionable at best.
Morgan Stanley Has Sol Fever
Morgan Stanley has filed with the U.S. Securities and Exchange Commission for approval to launch its own crypto-linked exchange-traded funds, covering Bitcoin and Solana, marking the first time a central U.S. bank has sought to issue ETFs tied directly to cryptocurrency prices. The move reflects growing investor demand for ETF-based crypto exposure, which offers a more liquid and regulator-friendly alternative to holding tokens directly, without the complexity of private keys or cold storage.
The filings come as regulatory conditions in the U.S. continue to ease, allowing banks to take a more active role in crypto markets following the approval of the first U.S. spot Bitcoin ETF two years ago. Morgan Stanley's push follows its recent expansion of crypto access to all clients and account types. At the same time, other major banks, including Bank of America, have also begun allowing advisers to recommend crypto allocations. Together, these steps show crypto has shifted from a compliance concern to a mainstream product that large banks are now expected to offer.
Institutional Investors Have RTW, And So Has The Money
Bitcoin and a small group of leading cryptocurrencies are strengthening in early 2026, while most altcoins continue to lag, reinforcing what analysts describe as a “K-shaped” crypto market. Market breadth remains weak, with capital concentrating in established assets such as Bitcoin and in sectors like artificial intelligence and real-world assets. At the same time, many smaller or unlock-heavy tokens face ongoing pressure due to limited adoption. In Oihyun Kim's article "K Shaped Crypto Market: Top Assets Rally as Altcoins Lag in 2026” he noted, “this split has been building for years, with fewer assets now driving overall market performance”.
Signs of renewed institutional demand are emerging through U.S. spot Bitcoin exchange-traded funds. CoinDesk reported that U.S. spot Bitcoin ETFs recorded their most significant daily inflow since October at US$697.2 million (AU$1.06 billion), bringing total net inflows to around US$1.2 billion (AU$1.7 billion) across the first two trading days of 2026. This shift has coincided with Bitcoin rising nearly 7% since the start of the year. Historically, extended ETF outflow periods have aligned with local market bottoms, and the recent return to positive flows, alongside a recovering Coinbase premium, suggests capitulation conditions may be easing as capital continues to rotate toward higher-quality assets.
Riot Dumps $162 Million Amid Rally Cooling.
What comes up, must come down and if you are reading this with a certain amount of whiplash, I mean, same. Riot Platforms sold a significant portion of its bitcoin holdings during November and December 2025, although the transactions were only disclosed this week. The publicly listed miner sold 383 BTC in November and a further 1,818 BTC in December, raising roughly US$200 million (AU$297 million) and reducing its total bitcoin balance to 18,005 BTC by year-end. According to VanEck’s head of digital assets research, Matthew Sigel, the sales could fully fund the first phase of Riot’s Corsicana artificial intelligence data centre, highlighting a growing link between bitcoin sales by miners and AI infrastructure investment as firms fund capital expenditure during tighter credit conditions.
At the same time, institutional bitcoin flows have shown short-term volatility rather than a clear shift in sentiment. U.S. spot Bitcoin ETFs recorded net outflows of US$243 million (AU$361million) this week, driven mainly by redemptions from Fidelity and Grayscale, despite strong inflows into BlackRock’s product. Decrypt reported from Industry Sources that the move was a “tactical repositioning and normalisation after strong early-January inflows, not a loss of long-term conviction”. Bitcoin’s token price has pulled back from recent highs while selective strength continues in Ethereum and Solana ETFs, with broader digital asset trust activity moderating rather than collapsing, suggesting consolidation rather than disengagement.
MSCI Revisits DATCO Exclusions: DATCO’s Cheer
MSCI has dropped its proposal to exclude Digital Asset Treasury Companies (DATCOs) from its indexes and instead announced a broader review into how non-operating companies should be treated. The index provider said it will maintain the current classification of companies on its preliminary DATCO list, defined as firms where digital asset holdings make up 50% or more of total assets. This decision means companies such as Strategy will remain in MSCI’s global benchmarks for now, ahead of the February 2026 index review.
Digital Asset Treasury Companies exploded in 2025 as institutional investors sought new ways to hedge against inflation and macroeconomic pressures, and turned to digital assets.
MSCI said investor feedback raised concerns that some DATCOs share characteristics with investment funds, prompting the need for further research and consultation. The firm noted that distinguishing between investment companies and businesses that hold digital assets as part of their core operations may require additional eligibility criteria, including financial statement-based indicators.
Following the announcement, shares in Strategy, one of the most oversized BTC holders and run by the GodFather of DATCO’s shares, rose about 6% in after-market trading, after falling roughly 47.5% in 2025, with the company calling the decision a positive outcome for neutral indexing and economic reality.
Bets For 2026, Anyone?
Who’s placing bets on what 2026 could look like? Whatever happens, 2026 is going to be a big year for the industry. The key themes to look for this year are: regulation, institutional capital and new financial products set to reshape the market. After a volatile end to 2025 and a sharp pullback in Bitcoin prices, the industry is increasingly moving beyond its boom-and-bust past and into a phase of institutional integration. Regulatory clarity is a central theme, with the proposed CLARITY Act expected to define oversight between the SEC and CFTC, potentially enabling deeper engagement from banks, asset managers and advisers (Quartz; Source: Money.com). Stablecoins are also expected to expand rapidly, and companies like Ether are poised to benefit.FI are betting on this trend for its future growth.
Alongside regulation, analysts expect an “ETF palooza” in 2026, with more than 100 new spot, multi-asset and leveraged crypto ETFs potentially launching in the U.S., drawing tens of billions of dollars in inflows even as many products struggle to survive. Prediction markets are also forecast to grow sharply amid a more permissive regulatory environment, with volumes expected to rise ahead of U.S. elections. Despite broad agreement that crypto is becoming more mainstream, views on price direction remain deeply divided. On one side of the room, analysts see institutional demand driving Bitcoin to new highs. On the opposite side of the room, others warn markets remain highly emotional and vulnerable to sharp swings, suggesting volatility will remain a defining feature of crypto in 2026. Who’s right, who’s wrong, we’ll have to wait and see.
What Made Us Laugh This Week
Founder's Corner
The opening weeks of 2026 have been a familiar reminder that short-term price action is rarely the signal that matters most. Bitcoin’s early January rally toward the mid-US$90k range, followed by a quick pause, has once again drawn attention to charts and liquidations, while the more important story continues to unfold quietly beneath the surface. Markets are rotating, not retreating. Capital is becoming more selective, institutions are asserting themselves through ETFs and balance sheets, and the infrastructure layer of crypto is being reshaped in real time.
What we are seeing isn’t a reversal, but a recalibration. XRP’s breakout, miners reallocating bitcoin to fund AI infrastructure, and index providers reassessing how to treat digital-asset-heavy companies are not disconnected events. They are signals of an ecosystem transitioning from speculative reflexes to operational relevance. Volatility is still loud, but it’s no longer the main character. The real shift is structural.
This feels less like another cycle and more like a continuation of crypto’s long-delayed adulthood. Banks are no longer debating if they should offer crypto exposure, but how. ETFs are becoming the default access point for institutional capital. Regulators, while far from perfect, are moving from ambiguity to definition. These are the conditions that allow infrastructure to scale, not overnight hype.
What stands out to me most this month is how clearly capital is differentiating between assets with utility and those without. Bitcoin continues to absorb institutional flows. Ethereum and Solana are holding relevance where real activity exists. Meanwhile, much of the long tail continues to lag, reinforcing that the era of “everything goes up” is firmly behind us. This isn’t a bear market, it’s a filter.
Price will do what price does in 2026. Volatility will come and go. But the direction is clear: crypto is becoming infrastructure. And infrastructure doesn’t need hype; it needs adoption.
Richard Voice, Co-Founder, Wayex
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