Tokenization 'Supercycle' Set to Drive Crypto's Next Leg Higher in 2026: Bernstein

Bernstein has flagged the start of a tokenization 'supercycle' in 2026, with stablecoins, capital markets, and prediction markets expected to drive the next phase of crypto growth according to Bernstein analysis. The firm reiterated its $150,000 bitcoin forecast for 2026, with a $200,000 peak target for 2027 as reported. Despite a weak close to 2025, digital assets are seen as having bottomed, offering opportunities for investors to build exposure according to Bernstein.

Stablecoins are expected to expand beyond trading into mainstream financial infrastructure, including payments and neobanking. Bernstein estimates total stablecoin supply will rise by 56% to around $420 billion by 2026 according to analysis. Institutional adoption of tokenized assets is also expected to grow, with value locked on blockchains projected to double to $80 billion as Bernstein forecasts.

Prediction markets could see a 100% increase in trading volumes in 2026, reaching $70 billion according to Bernstein. This growth is attributed to clearer regulatory frameworks and growing legitimacy for digital markets. Analysts expect further adoption as tokenization becomes more integrated into traditional financial systems according to analysis.

Why Did This Happen?

The shift toward tokenization is driven by growing institutional confidence and regulatory clarity, especially in the U.S. and Europe. The U.S. passed the GENIUS Act in July 2025, creating a federal framework for stablecoin oversight according to analysis. In Europe, Markets in Crypto-Assets (MiCA) regulation has been fully implemented according to reports. These developments have spurred traditional financial firms to launch their own stablecoins and explore tokenized asset offerings according to industry analysis.

Regulatory clarity has reduced uncertainty for investors and allowed for more institutional-grade products. For example, Western Union announced plans to issue a U.S. Dollar Payment Token on the Solana blockchain according to reports. This trend signals a broader acceptance of tokenized assets in real-world financial transactions.

How Did Markets Respond?

Bitcoin's price has remained relatively stable at around $91,600 as of early January 2026 according to data. Despite ending 2025 down 6%, the asset is still seen as undervalued by analysts. The broader crypto equity market, however, delivered strong returns in 2025, with an average gain of 59% despite a fourth-quarter cooldown according to Bernstein.

Crypto-linked equities such as Coinbase (COIN), Robinhood (HOOD), and Circle (CRCL) are viewed as key beneficiaries of the tokenization supercycle. Bernstein has reduced its price targets for these firms but still sees strong upside potential according to analysis. Meanwhile, the U.S. military intervention in Venezuela has triggered a speculative rally in crypto markets, with Bitcoin rising 5% in three days as reported.

What Are Analysts Watching Next?

Stablecoin adoption and tokenization of real-world assets are seen as the next major growth drivers. Bernstein expects tokenized assets to expand into capital markets, where they could replace or complement traditional instruments. Fintech firms like Block and PayPal are already experimenting with token-based payment systems according to analysis.

Prediction markets are also gaining traction, with platforms like Polymarket and Gnosis potentially reaching new heights of liquidity. Bernstein forecasts $70 billion in total volume for 2026, driven by institutional participation and clearer regulatory guidance according to Bernstein analysis.

Investor sentiment remains cautious but optimistic, especially as the U.S. Securities and Exchange Commission becomes fully Republican and moves toward a more pro-crypto regulatory stance according to reports. With clearer rules and growing adoption, digital assets are increasingly seen as a legitimate part of global financial infrastructure according to analysis.

Bitcoin miners are also diversifying into AI infrastructure, leveraging their data-center footprints to compete with traditional providers according to industry reports. This shift could offer more stable cash flows during down cycles and increase the economic viability of crypto mining operations according to analysis.

Overall, the combination of regulatory clarity, institutional adoption, and technological innovation is creating a favorable environment for crypto markets in 2026. While volatility remains, the sector is positioned for a new phase of growth.