Crypto ETP firm 21shares on 24 June published its State of Crypto 2026: Mid-Year Update, a data-driven audit of ten industry forecasts the firm made in December 2025. The report examines Bitcoin's market cycle behavior, institutional investment flows, decentralized prediction market growth, Ethereum Layer-2 consolidation, and real-world asset tokenisation progress. The analysis concludes that long-term structural trends are holding up, even where short-term price targets have slipped, with Bitcoin forecast to recover toward $100,000 by year-end 2026 after peaking at $126,000 in October 2025.
Bitcoin Market Cycle Demonstrates Structural Maturity
Bitcoin peaked at $126,000 in October 2025 and corrected sharply afterward, tracking closely with historical post-halving rhythms according to the report. Eliezer Ndinga, Head of Research at 21shares, stated that on-chain data shows structural maturity, with the current drawdown far milder than the 80%+ corrections of previous cycles. Bitcoin has continuously stayed above its aggregate investor cost basis of $54,000. Fundamental metrics point to a base-case recovery toward $100,000 by year-end, rather than an unbacked breakout.
Net underlying Bitcoin holdings in crypto ETPs sit at 1.25 million coins, still within 8% of all-time highs. The report notes that holders are not liquidating, indicating quiet conviction among institutional investors.
Institutional Crypto ETP Holdings Remain Near All-Time Highs
Global crypto ETP assets under management stand at $140 billion, down 15% year-to-date. Adrian Fritz, Chief Investment Strategist at 21shares, noted that what stands out at this mid-year mark is the profound resilience of institutional capital, with allocators holding through volatility.
The headline AUM drop reflects price movements, not mass redemptions, according to the report. Underlying coin holdings tell a different story. Hyperliquid ETFs launched in the US and gathered $150 million in their first month alone, signaling appetite for platforms with verifiable, on-chain operational revenue.
Decentralized Prediction Markets Process $57.5 Billion Through May 2026
Through the end of May 2026, the decentralized prediction market sector processed $57.5 billion in volume, already surpassing half of its original full-year projection according to the report. Platform integrations across Google and X, combined with resolved regulatory hurdles, have accelerated adoption.
With the second half of 2026 packed with event catalysts including the FIFA World Cup and US midterm congressional elections, annual volumes are now pacing to challenge the $200 billion mark according to the report's analysis.
Base, Arbitrum, Optimism Capture 83% of Ethereum Layer-2 DeFi Value
Base, Arbitrum, and Optimism now control 83% of all Ethereum Layer-2 DeFi total value locked, a consolidation that leaves underdifferentiated rollups facing structural attrition or forced migration to app-chain models according to the report. Liquidity and active users have centralized rapidly around the three leading rollups, compressing the viable operating space for smaller competitors.
This outcome aligns with observations from Ethereum co-founder Vitalik Buterin, who identified the risk of isolated scaling chains with limited distribution models according to the report.
Tokenised Real-World Assets Reach $31 Billion on Public Blockchains
On public blockchains, tokenised assets total $31 billion, anchored by $15 billion in tokenised US Treasuries according to the report. On permissioned institutional networks like Canton, where assets serve as 24/7 collateral, the figure surges to approximately $350 billion.
The Depository Trust & Clearing Corporation (DTCC) is scheduled to begin operational integration for tokenising DTC-custodied US Treasuries in both July and October 2026 according to the report. The report notes that when the institution that clears the backbone of US financial markets begins operationalising Treasury tokenisation, the line between traditional finance infrastructure and distributed ledger technology stops being theoretical.
FAQ
What does the State of Crypto 2026: Mid-Year Update report by 21shares cover?
The report revisits ten core industry forecasts made in December 2025, auditing their accuracy and analyzing market developments across price cycles, institutional flows, Layer-2 scaling, prediction markets, and asset tokenisation.
Is Bitcoin's traditional four-year market cycle still relevant in 2026?
According to the 21shares report, Bitcoin's 2025–2026 price action resembles previous cycles with milder corrections and structural on-chain maturity. Bitcoin has held above its aggregate investor cost basis of $54,000, with a forecasted recovery toward $100,000 by year-end 2026.
How is institutional demand reflected in crypto exchange-traded products this year?
Despite a 15% year-to-date decline in global crypto ETP assets under management to $140 billion, institutional investors hold 1.25 million Bitcoins near all-time highs. New products such as Hyperliquid ETFs raised $150 million in their first month, demonstrating continued institutional appetite according to the report.
