- Perpetual futures now drive most trading volume and anchor price discovery.
- Derivatives markets tightened leverage and risk practices after late-2025 liquidations.
- Prediction markets show growing liquidity and use for information discovery and risk transfer.
- Stablecoins and payments remain the main source of real-world crypto activity.
Coinbase Institutional, in a new report authored by David Duong and Colin Basco, frames 2026 as a test of whether core crypto markets can scale under stricter conditions. The outlook says market structure and institutional plumbing are shaping prices more than retail-driven narratives. It highlights derivatives, prediction markets, and stablecoin payments as central areas to watch.
The report identifies perpetual futures as a central pillar of market activity and price formation. Perpetual futures are derivative contracts without a fixed expiry that let traders hold leveraged positions. The authors note derivatives now account for the majority of trading volume on major venues and that pricing relies increasingly on positioning, funding rates, and liquidity conditions.
Authors describe a sharp reduction in leverage after liquidation events in late 2025 and view that drawdown as a structural reset. The report says speculative excesses were removed while participation in perpetual futures stayed resilient. It credits tighter margin practices and improved risk controls with helping markets absorb shocks more efficiently.
The outlook also addresses prediction markets, which it says are moving from experimental products toward durable infrastructure. Prediction markets are platforms where participants trade contracts tied to future events, used for information discovery and risk transfer. Rising notional volumes and deeper liquidity are drawing more sophisticated participants and creating demand for aggregation across fragmented platforms.
Finally, the report highlights stablecoins and payments as the most persistent source of real-world crypto usage. Stablecoins are tokens pegged to stable assets used for settlement, cross-border transfers, and liquidity management. The authors note growing transaction volumes and increasing links between payments, automated trading strategies, and emerging AI-driven applications.
The report concludes that 2026 will test whether these markets can scale and manage risk under tighter conditions, a result that could influence crypto market structure beyond the next price cycle.
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