Holding Pattern
Our outlook on crypto markets is neutral for 2Q26. The persistent and elevated levels of uncertainty surrounding the current geopolitical landscape make it extremely challenging to take short-term positions with conviction. As a result, we believe the environment calls for a balanced approach to risk and return. Financial markets are primarily being driven by macro events and the latest developments in the Middle East conflict, which can turn on a dime. While the ultimate impact on the global economy remains unclear, the IMF issued a statement revising their global GDP growth forecast from 3.4% to 3.1% this year, assuming the “conflict remains limited in duration and scope.” But Oxford Economics estimates that the severity of the oil disruption could cause global GDP growth to slow to 1.4% in 2026, as the “US and most major advanced economies slide into recession.”
There are still some important idiosyncratic factors that matter for crypto, such as regulatory developments and the rise of agentic AI. But they're playing second fiddle to the broader uncertainty that's keeping market players guessing.
As we go to press, we are cautiously optimistic that the macro situation has shifted in a positive direction, which could help many crypto assets form a bottom in the near term and recover later in the quarter. Indeed, technical indicators have generally turned positive across both the cryptocurrency and equity markets, though this is still contingent on a deal happening with Iran.
Beyond the geopolitical developments, the IMF Spring Meetings recently gathered a group of finance ministers and central bank governors to discuss the potential systemic risks posed by Anthropic’s new Mythos AI model. We think the model’s capacity to exploit security vulnerabilities is something that could have market implications further down the road.
Meanwhile, we see two endogenous crypto factors as important to watch in the short- to medium-term. The first is progress on the CLARITY Act, and the second is progress on post-quantum cryptography (PQC). See our Monthly Outlook: All the News You Can’t Use for more details.
Our latest survey of 91 global investors also provide some perspectives on crypto market trends, sector positioning, risk management, and more. Investors continue to see bitcoin as materially undervalued. Three‑quarters of institutions (75%) and around three‑fifths of non‑institutions (61%) view BTC as undervalued, little changed from December 2025, while only 7% of institutions and 11% of non‑institutions see it as overvalued.
To help navigate these unprecedented times, we’re pleased to provide the latest updates of the market data and onchain analytics that can help investors better understand the trends that are shaping markets today, and how they may affect the cryptoeconomy going forward. We hope you find the publication useful as you navigate crypto markets, and we welcome your feedback and questions.
