Market Update January 2026: Crypto Consolidates, Institutions advance

As 2025 has just ended and 2026 has begun, financial markets are balancing between consolidation and innovation. Bitcoin has cooled off after two years of triple-digit returns, with price action defined by range-bound trading and cautious investor sentiment. At the same time, institutional adoption accelerated. In the EU, increased adoption is due to the regulatory framework of MiCAR. Outside this regulatory framework, the adoption can be explained by the increasing demand of Bitcoin-backed lending. While traditional banks are regaining strength, crypto is no longer the outsider. It’s being integrated into the core financial infrastructure.

At Blockrise, we've taken bold steps to build on these trends. By expanding our team and office, and securing our MiCAR license with Blockrise Capital, we've transformed long-term vision into operational execution. In this update, we cover market developments, our portfolio positioning, and the broader forces shaping the future of finance - from Wall Street to Europe and beyond.

Market Update

A brief analysis on Bitcoin and Blockrise Fundamentals:

Bitcoin Analysis

In 2025, Bitcoin had a negative performance of 15,5%, following two consecutive years with returns exceeding 130%. After this strong expansion, price action has entered a fragile consolidation phase that has persisted for several months. The market is characterised by heavy overhead supply, ongoing loss realisation, and repeated failures to establish sustained demand. As a result, Bitcoin finds resistance near $93k and support around $80k.

From an on-chain perspective, upside momentum remains constrained. The cost basis of short-term holders (STH) currently sits around $101.5k. Moreover, the price has failed to reclaim even the 75th percentile of this metric. Hence, recent buyers remain underwater. This also limits their willingness to add exposure and suppresses bullish continuation.

Derivative markets reinforce this cautious backdrop. Futures positioning continues to de-risk, with open interest trending lower and funding rates hovering near neutral levels. This behaviour reflects a lack of speculative conviction rather than forced deleveraging. In other words, futures markets are neither accelerating downside pressure nor providing fuel for a renewed upside move.

Encouragingly, long-term holder supply growth has recently turned positive after several months of net distribution. While this shift is still in its early stages and cannot yet be classified as a sustained trend, it represents a constructive development. A meaningful recovery toward the STH cost basis, combined with declining sell-side pressure and continued accumulation by long-term holders, remains a key prerequisite for the emergence of stronger upside momentum.

Fundamentals

Blockrise offers comprehensive care with its asset management strategy called "Fundamentals." This strategy involves managing assets in Bitcoin versus an euro position, reassessing and adjusting these positions monthly.

Our portfolio strategy recorded a negative performance of 19,9% in 2025, underperforming Bitcoin by 4,4%. Despite this, the strategy has outpaced Bitcoin slightly in recent months, driven by its contrarian positioning. Nonetheless, our decision to exit Ethereum, following a prolonged period of negative returns, continues to weigh on the yearly performance.

December was marked by largely sideways movement, ending with a negative performance of  4,7%. However, underlying indicators are gradually shifting from a bearish to a more neutral trajectory. Given Bitcoin’s relative overvaluation compared to the previous month, we maintained our existing asset allocation: 92,5% exposure to Bitcoin and 7,5% to euros

Crypto Highlights

An overview of the most notable events in crypto:

Wallstreet embraces Crypto

Jamie Dimon, long known for his scepticism, once referred to crypto as a “decentralised Ponzi scheme” and “a pet rock.” But as the regulatory landscape evolves and client demand continues to grow, even JPMorgan is adjusting its stance. In essence banks provide for their clients, and when clients want a mountain moved, you move it.

JPMorgan has now indicated it is likely to offer crypto access to its institutional clients. Across the industry, sentiment has shifted: banks are beginning to recognise that ignoring crypto may create a competitive disadvantage. Even Jamie Dimon can’t dismiss a market when his clients are actively asking to participate.

Dealmaking Hits Record Pace in 2025

Crypto dealmaking reached an all-time high in 2025, with more than $8.5 billion in transactions closed. This surge coincided with the MiCAR regulation in Europe and renewed regulatory focus from the U.S. government. The crypto market has become a top priority on both sides of the Atlantic.

MiCAR not only brings much-needed regulatory clarity, but also acts as a natural barrier to entry due to its lengthy and costly licensing process. These factors drive consolidation through buy-and-build strategies.

According to law firm CMS, the recent decline in Bitcoin’s price has had little impact on ongoing deal discussions. A total of 267 deals were completed, nearly +20% more than in 2024. The largest of these was Coinbase’s $2.5 billion acquisition of Deribit, a leading options exchange.

With regulation tightening, the pace of M&A activity is expected to accelerate even further in 2026.

Macro Economy

An overview of relevant global economic events:

Revenge of the Banks

Over the past decade, alternative asset managers aggressively expanded into the credit space traditionally dominated by banks. Now, the momentum appears to be shifting back. Investors are showing renewed confidence in U.S. banking giants, invigorated by a more favourable regulatory landscape and improving credit market conditions.

Major bank stocks have surged more than 45% this year, significantly outperforming alternative asset managers like Blackstone, Apollo Global Management, and KKR.

This reversal is largely attributed to the incoming Trump administration's deregulatory stance and the recent defeat of the so-called Basel III Endgame. The proposal aimed to enforce stricter capital requirements. Freed from those constraints, banks have significantly ramped up lending.  Hundreds of billions were deployed in 2025 alone, regaining their share in the private credit space.

However, this comeback does not necessarily imply a de-risking of the credit market. Banks are targeting the same high-yield segments that made alternative lenders attractive in the first place. Rather than deleveraging, they are embracing risk, just at more attractive rates.

Regulators have raised concerns about the opaque valuation practices used by some private equity and credit managers. These worries have intensified following recent high-profile defaults, including Tricolor Holdings and First Brands Group. As Jamie Dimon said in an investor call  “if there is one cockroach, there are probably more”. The statement underscored potential vulnerabilities in the private debt sector.

European Markets Watch for Ukrainian Peace Breakthrough

European markets remained subdued early this week, as attention turned to peace talks between Ukraine and the United States. Investors are closely monitoring developments, hopeful that a resolution could bring stability to one of the continent’s largest geopolitical flashpoints.

On December 29th, President Trump stated that "a lot of progress" had been made in the negotiations, though he acknowledged it could take “several more weeks” to finalise a deal. The previous day, Ukrainian President Volodymyr Zelenskiy met with Trump at Mar-a-Lago for lunch. Afterwards they held joint discussions and consulted with European leaders via phone.

The atmosphere at the press conference was notably conciliatory, with Trump praising Zelenskiy’s leadership. Still, the key issues remain unresolved, particularly the status of the Donbas region.

President Putin continues to insist that Ukraine formally cede control over parts of eastern Ukraine, despite Russian troops failing to achieve full military control over the area. The impasse keeps markets cautious as the conflict drags into its fourth year, marking Europe’s deadliest war since World War II.

Disclaimer

Blockrise™ is a trademark of Blockrise Capital B.V. in the Netherlands and other countries. Blockrise Capital B.V. is a private limited liability company registered in the Netherlands, under Chamber of Commerce number 74879782. Blockrise Capital B.V. holds a MiCAR licence with number 41000029, issued by the Dutch Authority for the Financial Markets (AFM). Blockrise Lending B.V. is a group company and does not hold a MiCAR-license.

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