CoinShares' 2026 Cryptocurrency Predictions: Mining Model Differentiation, Investment Track Focus, and the Rise of Prediction Markets

This article does not constitute investment advice. Readers should strictly abide by local laws and regulations.

CoinShares has published its annual Digital Asset Outlook report. The following are some key points from the “Conclusion: Emerging Trends and New Frontiers” section worth noting:

1. Strong Recovery of Crypto VC Financing: In 2025, crypto VC funding has surpassed last year’s levels, confirming that crypto investments exhibit a “high beta” performance relative to macro liquidity. Under an expected loosening macro environment, capital inflows are expected to continue, supporting growth in 2026.

2. VC Investment Focus on “Large Deals” and Utility: Investment styles are shifting from dispersed to centralized large deals, with capital favoring a few top projects, and placing greater emphasis on actual utility and cash flow rather than empty concept hype or meme coins.

3. Four Major Investment Sectors in 2026: Looking ahead to next year, VC will focus on RWA (with stablecoins at the core), AI combined with crypto for consumer applications, on-chain investment platforms for retail investors, and infrastructure to enhance Bitcoin’s practicality.

4. Market as an Information Tool: Prediction markets like Polymarket have crossed from niche to mainstream information infrastructure. Their trading activity remains high after major elections, and market odds have proven to be highly accurate.

5. Institutionalization of Prediction Markets: Prediction markets are accelerating in institutional adoption, with ICE’s strategic investment as a key signal. This indicates traditional financial institutions recognize their value, and prediction markets are likely to expand influence through competition and integration, creating new trading records.

6. Mining Companies Accelerate Transition to HPC (High-Performance Computing): Bitcoin miners are undergoing a fundamental shift to higher-margin HPC/AI data centers. By the end of 2026, the proportion of mining revenue for transformed companies is expected to drop below 20%, driven by HPC profit margins being roughly three times higher than mining.

7. Short-term Hashrate Growth Lag: Despite the strategic shift to HPC, due to large orders in 2024 being concentrated in 2025, the overall network hashrate remains in a strong growth phase. This is a short-term phenomenon, driven mainly by companies like Bitdeer and IREN.

8. Future Mining Model Differentiation: Traditional industrial mining will be replaced by four modes: ASIC manufacturer self-mining, modular (temporary) mining, intermittent (grid-balancing) mining, and sovereign nation mining. Long-term, hashrate will be dominated by sovereign states and ASIC manufacturers.

Crypto VC Funding: Where is the Capital Flow Going?

Jérémy Le Bescont—Chief Content Officer

Overall, 2025 marks the year crypto assets return to VC investment logic, ending nearly two years of stagnation or even downturn.

In 2023, total crypto sector funding was $11.53 billion, a significant drop from $34.9 billion in the previous year; in 2024, despite a recovery, funding reached only $16.54 billion. By November 11, 2025, total funding for the year had already reached $18.8 billion, surpassing 2024.

“This is the year with the most transactions in the past three years,” says Marguerite de Tavernost, VC investor at Ledger Cathay.

This growth also confirms a warming in the overall deal environment—by Q3 2025, global transaction volume reached $250.2 billion, exceeding levels from 2022 to 2024.

Concentration into Ultra-Large Deals

The most prominent feature this year is the concentration of capital into super-large deals. Prediction market Polymarket and ICE announced a $2 billion strategic investment; followed by Stripe’s $500 million investment in Layer-1 project Tempo, and $300 million in prediction market Kalshi.

These landmark funding rounds exemplify high capital concentration in single projects. Similar trends are also seen in other areas, especially AI.

“Previously, we usually entered with smaller amounts, then increased positions in subsequent rounds,” continues Marguerite de Tavernost—whose €100 million fund has invested in projects like Flowdesk, Ether.fi, Crypto, and Midas. “Now, we’re investing larger sums at earlier stages.”

Main capital providers remain familiar names: Coinbase Ventures, Pantera, and Paradigm are especially active in strategic rounds related to stablecoins, prediction markets, network layers, and DeFi applications.

In contrast, meme coins (excluding standout performers like Pump.fun) and NFTs have almost disappeared this year, indicating market fatigue with these themes and overall industry maturation.

Another notable trend is the privacy sector: Canton Network completed a $135 million Series E, followed by Mesh ($92 million) and Zama ($57 million Series B), becoming the most eye-catching cases in this investment logic.

If US government policies continue to favor crypto innovation, this theme may persist, especially now that Zcash (one of the earliest privacy coins) has a publicly listed treasury company controlled by the Winklevoss brothers.

Macro Context: The Connection with Liquidity

Before discussing 2026, understanding the macro backdrop shaping the 2025 recovery is crucial. Crypto VC funding is highly correlated with changes in the global liquidity environment, primarily driven by central banks worldwide.

While not always a one-to-one relationship, data consistently shows that crypto VC is a “high beta” indicator of macro liquidity cycles.

During tightening phases, especially 2022–2023, higher policy rates, rising real yields, and quantitative tightening significantly suppressed risk appetite. Risk investments, which rely on long-term capital and typically lack short-term cash flow, are hit hardest.

Crypto VC activity, which peaked at over $5 billion per month in 2021–2022, declined to well below $1 billion in 2023.

As the financial environment began easing at the end of 2023, risk sentiment improved gradually. The Fed paused rate hikes, inflation receded, and markets started pricing in rate cuts. These changes contributed to a gradual rebound in global liquidity, aligning with the recovery of crypto VC funding in 2024–2025.

While liquidity remains the core driver, Bitcoin price trends, regulatory progress, and new themes like RWA, Lightning-based infrastructure, and stablecoin settlement layers also influence short-term dynamics. Nonetheless, the overall pattern is clear:

When liquidity expands, crypto VC funding accelerates; when liquidity tightens, funding recedes. This highlights crypto VC as one of the purest reflections of the global monetary environment.

Therefore, in 2026, liquidity is unlikely to be a bottleneck, and favorable macro conditions supporting the 2025 recovery are expected to continue.

Additionally, unlike traditional funds, crypto funds often provide LPs with DPI earlier, thanks to high token liquidity and quick realization. If the Fed maintains an easy stance and global liquidity stays favorable, fundraising in 2026 could outperform 2025.

“Overall, under the pro-cryptocurrency policies promoted by the Trump administration, US market sentiment remains very positive,” confirms Ledger Cathay investor.

Even if liquidity tightens again, investment strategies may not be affected. Senior manager Jonathan King of Coinbase Ventures adds: “We invest through all market cycles. When sentiment is optimistic, the number of projects increases noticeably; but some of our best investments are made during slow and quiet markets. The timing of funding rounds may be longer depending on the cycle, but overall, our doors are always open.”

Four Major Trends to Watch in 2026

After understanding the macro backdrop, four areas merit ongoing focus in 2026: AI combined with crypto, RWA (Real World Assets), Bitcoin infrastructure, and retail investment platforms.

RWA (Real World Assets)

First, the tokenization vertical will undoubtedly continue to expand next year. Investments like Republic’s in Centrifuge, the $50 million Series A in stablecoin startup Agora (led by Paradigm and Dragonfly), and the notable Securitize SPAC listing announcement have attracted market attention, confirming strong interest from well-funded investors including J.P. Morgan, Clearstream, UBS, and Societe Generale in digitalized real-world assets.

Within this vertical, stablecoins again dominate:

“If you look at stablecoins, their market cap has grown 50% year-over-year. Forecasts suggest they could reach a $2 trillion asset class in the coming years.

We’ve already done a lot at the infrastructure level—ranging from B2B cross-border payments, localized stablecoins (like India’s p2p.me), to stablecoin networks such as Sphere (note: for cross-border payment gateways).”

“This extends to on-chain credit and new financing models. Stablecoins will continue to be flagship priorities for Coinbase Ventures and Coinbase’s overall strategy,” explains Jonathan King.

It’s worth noting that this sector may intensify competition across jurisdictions. MiCAR gives Europe a first-mover advantage in tokenization deployment, with relevant regulations now in force across the European Economic Area (EEA); whereas the US’s GENIUS Act, recently passed, is still in implementation.

AI Connected to Crypto

Over the past two years, public chains and applications linking crypto and AI have emerged continuously, covering valuation and monetization of resource consumption, payment automation, user identity verification, and autonomous AI agents. VC perceives this trend as accelerating significantly.

“Previously, we mainly focused on foundational infrastructure for crypto and AI. Next year, we hope to see more consumer AI applications built on crypto rails, such as new DeFi interfaces combining natural language trading and operations, and AI agents with asset management capabilities similar to wealth advisors,” says Jonathan King.

Marguerite de Tavernost adds: “This is a sector we hadn’t originally planned to prioritize, but eventually we made two investments related to AI and blockchain.”

Retail-Focused Investment Platforms

One potential factor impacting VC activity next year is the rise of native crypto consumer investment apps, exemplified by Echo and Legion.

Founded by prominent crypto figure Jordan “Cobie” Fish, Echo was acquired by Coinbase for $375 million in October 2025, drawing widespread attention. Its core feature is decentralized angel investing: through whitelist curator mechanisms, it opens equity financings and ICOs to users, essentially functioning as a “native on-chain VC fund.”

Notable cases include Layer-2 projects MegaEth and Plasma, which raised $10 million and $50 million respectively last year.

Its competitor Legion partnered with crypto exchange Kraken to launch a new platform for public issuance. Meanwhile, MetaDAO (backed by 6MV, Paradigm, and Variant) launched on Solana a funding platform with on-chain governance, designed to prevent default issues, which has already completed 8 oversubscribed ICOs.

After years of liquidity drought, such platforms are naturally gaining popularity, becoming new funding channels and directly competing with early-stage VCs.

Bitcoin Infrastructure

Finally, VC interest in Bitcoin-related areas is heating up. Ironically, given Bitcoin’s status as the most important digital asset, it has long been somewhat neglected.

Since Bitcoin cannot be “printed out of thin air,” the ecosystem outside mining has not been a typical LP choice—although mining continues to attract significant capital (e.g., Auradine’s $153 million Series C in April 2025).

With early financing successes of Layer-2 projects like Arch Labs (raised $13 million led by Pantera), BoB (Build on Bitcoin, a joint investment of Coinbase Ventures and Ledger Cathay), and BitcoinOS (raised $10 million in October 2025), market focus seems shifting toward more tangible investments that directly enhance Bitcoin’s utility rather than issuing new tokens on top of it.

This is similar to the case of Lightspark:

“Two years ago, the market’s attention on Bitcoin L2 was very high. Now, we see renewed focus on expanding Bitcoin’s utility, especially its security, and building new markets based on that,” notes Jonathan King.

From High Speculation to High Utility Investment Logic

Recent months’ developments and outlooks for 2026 indicate that capital is increasingly seeking projects capable of impacting existing financial infrastructure and providing “building blocks” for new systems, gradually moving away from tokens and public chains that are only conceptual with no tangible value.

Ethereum Layer-2 is no longer a market focus; general Layer-1s are cooling down, and terms like “Web3” and “NFT” are mentioned less frequently.

Of course, each cycle involves some micro-bubbles, and it remains to be seen how many stablecoin companies will survive. But overall, an era prioritizing cash flow and/or real utility appears more promising.

Polymarket’s Rise

Luke Nolan—Senior Research Associate

Although the concept of prediction markets has been around nearly five years, its widespread adoption and popularity mainly occurred in the past two, with the 2024 US election serving as a powerful catalyst.

Platforms like Polymarket have evolved from niche crypto products into mainstream real-time sentiment and “truth” sources, attracting users who don’t necessarily care about crypto itself but seek cleaner signals than traditional media or social platforms.

About 18 months ago, we wrote about Polymarket. At that time, we thought it might remain a hobbyist product with stable but limited usage. That judgment proved overly conservative. Since then, Polymarket’s liquidity and cultural influence have reached levels few anticipated.

During the 2024 US election cycle, markets related to presidential and congressional elections often saw weekly trading volumes exceeding $800 million, remaining consistently high, often surpassing traditional betting platforms and even some poll aggregator platforms.

Post-Election Continued Activity

Some observers expect that after the election, as public attention shifts, prediction market activity might decline sharply. But that’s not the case.

Trading volume remains strong, open positions stay well above pre-election levels, indicating that prediction markets may have crossed a “critical point,” moving beyond a one-time surge into a sustained phase.

More important than activity level is accuracy. The essence of prediction markets is aggregating dispersed information into a single probability, driven by financial incentives for participants to approach the true outcome. The chart shows how Polymarket odds compare to actual results at different times.

Interpretation is straightforward. For example, an event priced at 60% ultimately has about a 60% chance of happening as “yes”; events priced at 80% generally have a 77–82% realized probability in the hours before the deadline.

In other words, Polymarket functions like a well-calibrated prediction system—when it assigns an 80% probability, it tends to actually occur about 80% of the time. This reflects the performance expected of a “cost of error” system.

Institutional Adoption of Prediction Markets

This accuracy and liquidity have not gone unnoticed. In October 2025, ICE, parent company of NYSE, made a strategic investment in Polymarket (up to $2 billion), representing trust from one of the most traditional and core institutions in the global financial system.

Meanwhile, US competitor Kalshi, also aiming for regulatory compliance, continues expanding influence through integration with broker platforms, media partners, and data providers, fostering a competitive ecosystem that drives the entire sector forward.

These developments reveal a key fact—prediction markets are not just gambling venues for speculators but are becoming part of broader information infrastructure. Many who never trade still check Polymarket because its probabilities are “cleaner” than news headlines.

For traders, the appeal is clear: no house advantage, low fees on profitable trades, making long-term profitability statistically possible. In traditional betting, odds are designed to ensure the platform’s profit.

All these factors lead to a simple conclusion—prediction markets are likely to grow further, because they meet multiple needs:

Traders gain efficient markets, observers get “truth signals,” institutions obtain nearly free sociological or economic research data (presented as probabilities), and platforms grow stronger with scale, increasing liquidity and prediction accuracy.

The last two years’ trajectory shows Polymarket gradually becoming a way for people to understand the world. With the introduction of builder code, we expect 2026’s weekly trading volume to hit new highs, even surpassing $2 billion in some weeks.

HPC and Beyond: What’s Next for Mining?

Alexandre Schmidt—Index Fund Manager

Long-standing, Bitcoin miners have been a key channel for gaining exposure to blockchain and crypto assets via listed equities. After a phase of investment, expansion, and reaching industrial-scale mining, this market is shifting again.

In 2024, several miners announced plans to pivot into AI and HPC (High-Performance Computing); by 2025, most are actively building HPC data centers.

This article aims to answer two questions: Why is this transition happening? And, in a world where large industrial mining facilities are no longer being built, what is the future of mining?

2025: Industry-wide Expansion

In 2025, Bitcoin miners demonstrated strong growth. By September, the total hash rate of listed miners increased by about 110 EH/s, compared to roughly 70 EH/s at the same point in 2024.

Although this data seems inconsistent with statements that miners are “downgrading mining and shifting to HPC,” the reason is that these companies placed large orders with ASIC manufacturers in 2024, with equipment delivery occurring mainly in 2025.

Half of this year’s hash rate growth comes from three companies: Bitdeer (+26.3 EH/s), HIVE Digital (+16 EH/s), and Iris Energy (IREN) (+15 EH/s).

HPC Transition Begins to Materialize

Beyond notable hash rate growth, the transition to HPC is finally reflected in actual contracts and revenue this year.

For Bitcoin miners, building and transforming facilities to host HPC workloads is highly attractive: it offers diversification, more stable and predictable income, with profit margins roughly three times higher per megawatt (MW), and enables participation in multi-billion-dollar deals announced by hyperscalers and semiconductor firms.

By the end of October 2025, miners announced contracts totaling around $65 billion with hyperscalers and new cloud providers (neoclouds).

These announcements significantly boosted stock prices of involved companies. These contracts will fundamentally alter their business models: easing the pressure from continuous Bitcoin hash rate growth, and substantially improving profit margins (most expect 80–90% operating margins from these contracts).

Thus, among the six companies that announced HPC contracts, we expect Bitcoin mining revenue to fall from about 85% of total revenue in early 2025 to below 20% by the end of next year.

Outlook for 2026

First, one key point: miners are still miners.

Most companies that pivoted to HPC currently generate the vast majority of their revenue and cash flow from Bitcoin mining.

In the near term, HPC will be more of an incremental supplement to existing operations rather than a direct replacement of Bitcoin mining capacity. However, with new contracts and increasing electricity demand, we do expect these companies to gradually and slowly exit some mining activities.

By 2026, some miners may still continue to expand their hash rate. Based on management discussions, CleanSpark states it still has options to increase its mining capacity by about 10 EH/s; Canaan recently announced a deal for 50,000 miners, indicating other miners may also significantly scale up.

In the longer cycle, the shape of Bitcoin mining is likely to differ markedly from today’s model, possibly including:

ASIC Manufacturers: Most likely to maintain near-industrial scale mining, as they need to place minimum orders to retain wafer fab capacity at TSMC. Unsold machines may be deployed in the ASIC manufacturer’s own mining farms.

Additionally, ASIC firms can design and produce equipment for internal use at significantly lower costs, supporting larger-scale operations.

Modular Mining: Some companies propose introducing temporary, portable mining modules at sites developed for other purposes. Once power infrastructure is in place, these modules can be connected, start mining, and operate until the site’s power shell is completed and leased out.

Intermittent Mining: A parallel alternative with HPC—facilities built for both purposes, running only when electricity prices are near zero, helping balance grid loads. In such cases, miners are more likely to use older, fully depreciated equipment with very low utilization.

Sovereign States: We believe sovereign nations already hold substantial non-public mining capacity. Motivations include foreign exchange acquisition, monetizing electricity assets, and direct access to the Bitcoin network. Given their financial resources and access to resources, state-level mining is expected to remain at an industrial scale in the foreseeable future.

The eventual dominance of any mode will depend on Bitcoin’s own incentive mechanisms and the sensitivity of participants’ economic calculations.

Our view is that, in the medium term, sovereign states and ASIC manufacturers will dominate hash rate distribution; long-term, mining may revert to smaller, more dispersed forms, leveraging cheap “stranded electricity,” likely from renewable sources.