“Quantitative tightening is over and balance sheets are growing again, but cycle theory and adoption concerns still cloud bitcoin’s upside, according to Schwab’s Jim Ferraioli.”, — write: www.coindesk.com
BTC is shaped by three long-term forces and seven short-term, according to Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research.
The long-term factors are global M2 money supply, bitcoin’s disinflationary supply growth and adoption. Short-term drivers include market risk sentiment, interest rates, US dollar strength, seasonality, central bank excess liquidity, the supply of large bitcoin wallets, and financial contagions.
Several of those short-term variables appear to be aligned in bitcoin’s favor as 2026 begins. Ferraioli noted that credit spreads remain tight and the market has already flushed out many of the speculative derivative positions that helped drive the sharp selloff in late 2025.
A “risk-on environment in equities should be supportive of crypto – the ultimate risk asset,” he said.
Monetary policy could also play a tailwind. “We believe rates and the dollar will continue to go lower this year,” he added. “Liquidity is supportive with quantitative tightening ended and balance sheet expansion started up again.”
Still, headwinds remain. Adoption could slow in the first half of the year, especially after the late-2025 volatility, although Ferraioli sees the potential for a turnaround if regulatory clarity improves. “Passage of the Clarity Act could accelerate adoption among true institutional investors,” he said.
There’s also the halving cycle to consider. “The third year of the halving cycle has historically been a bad year. Since there are a lot of crypto investors who follow that cycle theory, that could weigh on prices,” he argued.
Since 2017, bitcoin has typically gained about 70% from its annual low each year, although that measure is meant to smooth out volatility. While 2026 is expected to be a positive year, returns will likely fall well short of that historical average, according to Ferraioli.
He also flagged a possible shift in how bitcoin moves in relation to traditional assets. He expects the crypto to be less correlated to other asset classes and macro factors. “It is still highly correlated to megacap AI stocks, but correlation to broader equity indexes has been falling,” Ferraioli. said.
KuCoin captured a record share of centralized exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the broader crypto market.
- KuCoin recorded over $1.25 trillion in total trading volume in 2025equivalent to an average of roughly $114 billion per monthmarking its strongest year on record.
- This performance translated into an all-time high share of centralized exchange volumeas KuCoin’s activity expanded faster than aggregate CEX volumeswhich slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly spliteach exceeding $500 billion for the year, signaling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activityreinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activityindicating structurally higher user engagement rather than short-lived volume spikes.
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Market participants defended rising support while trading volume surged 66% above average during resistance tests near $908, pointing to increasing demand ahead of a major network upgrade.
- BNB broke through the $910 resistance zone, rising 2% to top $920, as the broader cryptocurrency market saw a 5.3% increase in the CoinDesk 20 (CD20) index.
- The rally comes ahead of the planned Fermi hard fork on January 14, which aims to improve the BNB Chain’s capacity to 20,000 transactions per second and make it more attractive to developers.
- BNB reached an intraday high of $921.47 and now sits near the next breakout target at $928, with bulls eyeing a potential move toward $1,066 if momentum holds.
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