Bitcoin Cooldown May Signal a Shift Toward an Institution-Led Crypto Market

Bitcoin May Enter a Prolonged Correction Phase

(Source: Official_Cantor)

According to Cantor Fitzgerald’s year-end report, Bitcoin is now about 85 days past its previous high, with price action reflecting the early stages of the “cooling period” seen in the typical four-year cycle. Analyst Brett Knoblauch notes that market pressure could persist in the short term, and Bitcoin may still test the key cost zone near $75,000.

This Correction Differs from Previous Bear Markets

The report highlights that this market cooldown is unlikely to lead to the kind of large-scale liquidations or systemic failures seen in past cycles. Unlike earlier periods dominated by retail sentiment, the market structure has shifted decisively toward institutional players. There’s a growing disconnect between price movements and actual on-chain activity.

On-Chain Fundamentals Are Still Expanding

Despite cautious sentiment, decentralized finance, crypto infrastructure, and asset tokenization continue to advance. The report points out that the value of on-chain real-world assets (RWA) has grown to roughly $18.5 billion in just one year, spanning credit, U.S. Treasuries, and equities. By 2026, this figure could exceed $50 billion.

Structural Shift in Trading Behavior

Trading patterns in the crypto market are evolving. Decentralized exchanges (DEXs) are steadily taking market share from centralized platforms, especially in derivatives like perpetual contracts. Even if overall trading volume declines alongside Bitcoin’s price over the next year, Cantor remains bullish on DEX growth as infrastructure and user experience improve.

Regulatory Clarity Is a Key Variable

The recent passage of the Digital Asset Market Transparency Act (CLARITY) in the U.S. marks a major milestone. The act clearly defines the legal status of digital assets at different stages of decentralization and gradually shifts spot market oversight to the CFTC, helping reduce policy uncertainty.

Favorable Regulatory Environment Supports Institutional Entry

The report asserts that a clear legal framework not only lowers headline risk, but also gives banks and asset managers a more defined path to participate. Decentralized protocols now have a realistic compliance pathway for the first time, helping resolve longstanding regulatory barriers.

On-Chain Prediction Markets Are Rapidly Expanding

Another trend worth noting is the rapid growth of on-chain prediction markets, especially in sports betting. Trading volume in this sector has surpassed $5.9 billion, exceeding half of DraftKings’ single-season betting volume. Legacy and crypto platforms like Robinhood, Coinbase, and Gemini are entering the market, bringing more transparent, order book-driven trading models.

Potential Risks Cannot Be Ignored

While structural factors remain positive, Bitcoin’s price is just above Strategy’s average holding cost. A drop below this level could still undermine market confidence. Additionally, digital asset trusts (DATs) have seen a marked slowdown in accumulation as prices and premiums compress.

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Summary

Cantor Fitzgerald does not view the current market as a broad downturn, but rather as a necessary period of adjustment. As prices cool, on-chain assets, trading structures, and regulatory frameworks are steadily maturing. While a breakout rally is unlikely in the near term, the crypto industry is quietly laying the foundation for a more resilient, institutionally driven next phase.