Bitcoin's 2026 Outlook Is Positive, But Ethereum, XRP May Face A Reckoning: Report

Bitcoin (CRYPTO: BTC) is increasingly being treated as a monetary asset rather than a speculative trade, as institutional capital concentrates in BTC and leaves most altcoins struggling to keep up.

Bitcoin Separates From The Rest Of Crypto

Messari's 2026 outlook frames 2025 as a turning point where Bitcoin decisively broke from the broader crypto market. 

While earlier cycles saw capital rotate from BTC into higher-risk tokens, the opposite trend now dominates. 

Bitcoin's market share has climbed above 57%, up from roughly 37% three years ago, even as many large-cap altcoins remain deeply below prior highs.

From December 2022 through late 2025, Bitcoin rose more than 400%, while most major tokens lagged. 

Ethereum (CRYPTO: ETH) gained about 135% over the same period, while several Layer-1 assets posted negative returns. 

Messari argues this divergence reflects a repricing of Bitcoin as crypto money rather than another high-beta digital asset.

ETFs And Treasuries Drive Persistent Demand

A major force behind Bitcoin's resilience has been institutional demand through spot ETFs and corporate treasuries. 

According to Messari, spot Bitcoin ETFs now hold more than 1.3 million BTC, representing over 6% of the asset's total supply. 

BlackRock's iShares Bitcoin Trust (NASDAQ:IBIT) has emerged as one of the fastest-growing ETFs in history, reinforcing Bitcoin's role as a regulated monetary vehicle.

Beyond ETFs, nearly 200 companies now hold Bitcoin on their balance sheets. 

Public firms alone control roughly 1.06 million BTC, with Strategy accounting for the largest share. 

Messari notes that these digital asset treasuries have reshaped Bitcoin's liquidity profile, allowing large transactions to occur without the market impact seen in prior cycles.

Why Bitcoin Underperformed Gold In 2025

Despite its long-term outperformance, Bitcoin lagged gold and equities in late 2025. 

Gold rose more than 60% year-to-date, while Bitcoin slipped into negative territory. 

Messari attributes this divergence largely to selling pressure from early, large-balance holders who gained new exit liquidity through regulated markets.

Onchain data cited in the report shows that wallets holding between 1,000 and 100,000 BTC were net sellers throughout 2025. 

This distribution coincided with a slowdown in ETF and treasury inflows during the second half of the year, creating a temporary supply-demand imbalance.

Messari does not view this as a structural breakdown. 

Instead, the firm describes it as a short-term digestion phase following years of aggressive accumulation.

Altcoins Face A Valuation Reset

While Bitcoin consolidates its monetary role, Messari warns that most altcoins face deteriorating fundamentals. 

Layer-1 revenues declined year-over-year, even as valuations remain elevated. 

In many cases, prices appear supported by a perceived "monetary premium" rather than cash flow or usage growth.

The report expects most layer-1 assets to underperform Bitcoin unless they can clearly establish themselves as cryptomoney or deliver sustained economic value. 

A small number of exceptions may exist, but Messari argues the era of broad-based altcoin outperformance has ended.

Bitcoin Enters 2026 In Correction As Key Support Turns Into Supply

BTC Price Action (Source: TradingView)

Bitcoin is near the end of 2025 with its structure weakened, but not broken, after a decisive loss of the $96,000–$98,000 range, which previously acted as higher-timeframe support. 

That breakdown marked a clear shift from trend continuation into a corrective regime.

On the daily chart, price remains below major EMAs, all of which are sloping lower and clustered between $94,000 and $100,000. 

This zone has developed into a firm supply band, reinforced by repeated rejection attempts and prior breakdown structure. 

As long as recoveries stall below this cluster, upside momentum remains structurally capped.

Downside risk is defined first by the $83,000–$84,000 region, which marks the most recent reaction low and prior range base. 

A sustained break below that level would open the door to the broader $74,000–$76,000 demand zone.

For any medium-term recovery to take hold, Bitcoin would need to reclaim $96,000 and then establish acceptance above $102,000, where the 200-day EMA currently sits. 

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