The Obvious and the Non-Obvious Hidden in the 2026 Cryptocurrency Market: Era of Institutional Investors or End of Individuals

DeFi Researcher Ignas continues the “Truth and Lies” series from last year, using Peter Thiel’s thinking framework to delve into the 2026 crypto market. The biggest insight is that the US stock market bubble is holding cryptocurrencies hostage, and the conflict between self-evident truths and non-self-evident truths dominates market price formation. BTC (Bitcoin) is completing its narrative shift from risk assets to digital gold, and the traditional 4-year cycle theory may already be invalidated.

Cryptocurrencies constrained by macro bubbles

Currently, the US stock market has entered a “bubble” zone. The price-to-earnings ratio (PER) has reached 40.5x, already surpassing the 32x just before the 1929 crash. Additionally, the total market cap to GDP ratio, which Warren Buffett calls “the best single indicator of valuation,” has reached 230%, 77% higher than the long-term average of 153%. Before the 1929 crash, this ratio was 130%.

Of course, there are claims that “this time might be different.” The logic of currency devaluation, with the dollar being devalued and the world digesting debt through inflation, is often cited. However, this seemingly self-evident argument might itself be a “non-self-evident lie.”

If that were truly the case, then doubling the money supply should double stocks as well, keeping the ratio unchanged. But in reality, the rate of stock price increase is 28 times the rate of money creation, and this line is heading vertically upward. In other words, stock prices are rising in a way that cannot be explained by mere currency devaluation.

Alternatively, AI might indeed be transformative, rendering traditional metrics obsolete. Due to macro uncertainties, inflation, and rising geopolitical tensions, people are living amidst “universal economic anxiety.” The era’s craving is for stability, ownership, and exposure to growth. People are still children of capitalism, and their desires are inherently capitalist.

Therefore, for most, the clearest answer is to hold stocks and equities and withstand market fluctuations over the foreseeable 12 months. Unsurprisingly, fewer and fewer people are willing to stake 100% of their positions in altcoins now.

The Self-Evident Fallacy: Do Individual Investors Truly Return?

The crypto community still seems to be waiting for a mass return of “beginners.” But we must not turn a blind eye to self-evident facts. Individual investors are battered and more concerned than ever under the current macro environment.

They have been harvested in turn by ICOs (2017), NFTs (2021), and Memecoins (2024). Each trend is essentially value extraction, with individual investors providing exit liquidity. The next wave of capital will likely come from institutions, not individuals.

As Zach from Chainlink points out, there is a big difference between individual and institutional investors. Institutions do not buy worthless coins. They do not buy “governance rights” with zero protocol revenue. What they buy are tokens with fee-switches and real yields (dividend-like attributes), projects with clear product-market fit (PMF) such as stablecoin issuers and prediction markets, and regulated targets.

Tiger Research predicts that “utility-oriented token economics have failed. Governance voting rights did not attract investors.” Projects that cannot generate sustainable income will exit the industry, they believe.

However, there is a more serious concern about 2026. If tokens cannot provide such value, institutional investors might bypass tokens altogether and buy shares of development companies directly. When Coinbase acquired the advanced tech team Axelar, they showed no interest in acquiring tokens. Conflicts of interest between Aave Labs and DAOs are already apparent.

If this issue is not addressed, ultimately, smart capital will own shares (true value), and individual investors will own tokens (exit liquidity). For crypto to succeed, value must flow into tokens, not into Labs companies. Otherwise, it’s just a rehash of the traditional financial system. This is a critical issue to watch carefully over the next year.

The Overlooked Self-Evident Truth: The Reality of Quantum Risks

Quantum risks have two layers: one is the actual threat of quantum computers destroying blockchains or wallets that do not depend on quantum-resistant technology; the other is the perceptual risk arising from investors recognizing that quantum risk is real.

Few truly understand quantum technology, and the crypto market is dominated by narratives, emotions, and momentum. This structure makes crypto vulnerable to large-scale FUD attacks.

The biggest non-self-evident truth is that until these risks are fully addressed, quantum risk will continue to suppress crypto prices. It’s not necessary for Satoshi’s wallet to be physically compromised by a quantum computer. Headlines like “Google or IBM achieve quantum breakthrough” could trigger massive panic and drop BTC prices by 50%.

In this context, rotation into quantum-resistant chains, especially Ethereum, is foreseeable. Ethereum has prepared quantum resistance capabilities (The Splurge) in its roadmap, and Vitalik has explicitly expressed the need for this. Meanwhile, Bitcoin might trigger internal conflict over a hard fork to upgrade its signature algorithm from ECDSA to a quantum-resistant scheme. New Layer 1s might launch with “post-quantum cryptography” (PQC) as a key selling point.

However, if BTC neglects preparation and internal conflict erupts, market makers and hedge funds will likely reallocate portfolios by pulling down all crypto assets.

The Non-Self-Evident Opportunity: The True Growth Stage of Prediction Markets

Few opportunities in crypto are as self-evident as prediction markets. According to Andy Hall, research advisor at a16z crypto, this insight is remarkably accurate.

Prediction markets have already become mainstream in 2024. By 2026, they will be bigger, broader, and smarter. Andy Hall notes that prediction markets are moving beyond questions like “Who will win the US presidential election” to more specific outcomes.

Real-time odds for everything will be marketized—geopolitics, supply chains, and even individual questions like “Will Ignas issue tokens?” AI integration will enable AI agents to scan the internet for signals and trade in these markets, far more efficiently than human analysts.

The biggest trading opportunity lies in the question of “Who will determine the truth?” As market size expands, betting arbitrage becomes a serious issue. This has manifested in markets related to the invasion of Venezuela and Zelensky markets. Existing solutions (like UMA) have failed to capture subtle nuances, leading to controversy and accusations of “fraud.”

Therefore, we need decentralized truth mechanisms. For prediction markets to truly mature, the fundamental issue of truth determination must be solved. This is the non-self-evident challenge and simultaneously the greatest opportunity for 2026.

Finally, Ignas’s application of Peter Thiel’s framework emphasizes the importance of understanding the quadrants of self-evident and non-self-evident truths. In markets, attention often focuses on “self-evident truths,” while real opportunities and threats are hidden in the “non-self-evident” realm. To succeed in the 2026 crypto market, it is essential to step back from self-evident debates and focus on the realities most market participants overlook.