- Coinbase expects perpetual futures to stay central to crypto price discovery in 2026
- Prediction markets may gain depth and serve more as regular financial tools
- Stablecoins and payment flows remain the main source of real-world crypto use
Crypto markets enter a new stage in which trading activity and risk discipline matter more than simple narrative cycles, and Coinbase places this shift at the center of its latest institutional outlook for 2026. Instead of focusing on a repeat of retail-driven hype, the report reads the late-2025 shakeout in leverage as a reset that may allow a more durable market structure to grow. Three pillars stand out in this view: perpetual futures as the main engine of price discovery, prediction markets evolving into lasting infrastructure, and stablecoins with payments as the most consistent bridge between tokens and the real economy. By framing 2026 as a year that will test whether these pillars can scale under tighter conditions, Coinbase turns attention away from short-lived themes and toward the plumbing that actually carries volume, liquidity and information through the system.
Perpetual futures and Coinbase as an anchor for price discovery
Perpetual futures already account for the majority of trading volume on leading venues, and Coinbase treats this trend as the core of how crypto prices now form. Rather than viewing derivatives as a side market, the report describes them as the main arena where positioning, funding rates and liquidity conditions steer intraday moves. When open interest rises in perpetual contracts, traders respond faster to changes in margin requirements or funding imbalances than to headlines or social media sentiment, so leverage and liquidity together steer short-term price discovery. This structure means that traders who ignore derivative flows often miss the first signals of turning points in the market. The authors, David Duong and Colin Basco, take the liquidation events of late 2025 as the clearest example of this new regime, stating that markets saw a sharp reduction in leverage without a full retreat from perpetual futures. High-leverage positions unwound in a relatively concentrated window, but the underlying participation in derivatives remained in place, which suggests that many traders adjusted risk rather than abandoning the market. Coinbase reads this as a structural reset where speculative excess washed out while the core futures user base stayed active, creating room for more measured growth in 2026. With tighter margin practices and improved risk controls, exchanges can now absorb shocks more effectively, because they rely less on extreme leverage and more on consistent liquidity provision across markets and maturities. Funding rate dynamics also gain more weight under this framework, since they signal whether traders pay a premium to stay long or short in perpetual markets. When funding turns positive for long periods, it reveals a persistent demand to hold leveraged long exposure, while negative funding suggests sustained short pressure or hedging activity. Coinbase underlines that these patterns influence spot prices because arbitrageurs constantly trade between futures and spot to keep prices aligned, which pulls spot markets into the same risk cycle as derivatives. In this environment, the path of prices depends less on retail enthusiasm and more on how professional desks manage margin, inventory and basis trades across multiple venues.
Prediction markets gain depth and link to broader finance
Prediction markets once looked like experimental side projects, but the report argues that they now move toward a more stable role as part of financial infrastructure. Volumes on these platforms have grown not only in the number of individual bets, but also in the notional value and depth at key price points, which allows traders to infer probabilities from market prices with greater confidence. As more participants trade around events such as elections, policy decisions or key protocol upgrades, prediction contracts start to serve as a real-time dashboard for expectations that traditional markets sometimes capture only through less direct instruments. Market operators then gain new data on sentiment and risk that they can fold into broader trading strategies. Platform fragmentation still presents a challenge, since activity spreads across several chains and interfaces, but that same fragmentation creates demand for aggregation tools and routing services. The report notes how this gap encourages the growth of aggregators that pull quotes from multiple prediction venues, standardize odds and steer orders toward the best available liquidity. This process draws in more sophisticated participants who expect consistent execution quality and lower friction, rather than niche experiences on isolated platforms. Regulatory clarity in some regions also starts to matter more, as institutions look for jurisdictions where they can trade event contracts under clear rules instead of navigating grey areas, and Coinbase sees that shift as a sign of gradual normalization rather than a brief experiment. Another change comes from the user base. Early prediction markets catered mainly to crypto-native traders who moved between DeFi protocols with ease, but the current wave brings in users who care more about efficient exposure than about protocol details. As interfaces become simpler and back-end routing more advanced, these users can view prediction markets alongside other instruments such as options or structured products. That convergence allows desks to express views on outcomes with cleaner payoff profiles and to hedge specific risks that conventional futures or spot positions cannot isolate. According to the outlook, this broader integration helps prediction markets move from the margins of the ecosystem toward a role where traditional finance desks treat them as a standard tool.
Stablecoins, payments and Coinbase role in real economy flows
Stablecoins and crypto-based payments appear in the report as the most durable source of real-world usage, and Coinbase devotes a full pillar of its outlook to this theme. While trading volumes in tokens often rise and fall with cycles, stablecoin transactions related to settlement, cross-border transfers and liquidity management show a steadier upward path. Businesses use dollar-linked tokens to move funds across exchanges, pay suppliers in other regions, or rebalance treasury positions without waiting for banking rails that stop outside normal hours. This pattern turns stablecoins into a functional layer that underpins both speculative and non-speculative activity in the wider crypto economy. The report notes that payment flows now intersect with other parts of the system in more complex ways. Automated trading strategies rely on stablecoins to shuttle collateral across protocols, while on-chain payment processors connect merchants to customers who prefer digital assets for smaller transactions. Coinbase emphasizes that these flows extend into emerging applications that rely on artificial intelligence, where bots may need to execute micro-transactions for data access, model usage or content delivery. Rather than seeing AI as competition, the outlook describes a scenario where intelligent agents treat blockchains and stablecoins as neutral settlement layers that support their operations with predictable transfer rules and transparent records. Regulatory trends also influence this pillar. Jurisdictions that offer clearer guidance on stablecoin issuance, reserves and disclosure enable more cautious institutions to explore tokenized payment flows with lower perceived risk. Under such frameworks, firms can track how many settlement transactions run through specific stablecoins, how reserves back those tokens, and how auditors verify the structure that supports them. Coinbase expects this combination of transparency and usability to become a key test in 2026, as regulators evaluate whether stablecoins reduce friction in cross-border payments without adding unacceptable systemic risk. If these projects meet higher standards while maintaining growth in transaction volume, they can anchor a larger share of crypto activity in practical rather than purely speculative use cases.
2026 as a stress test for market plumbing and disciplined growth
The report frames 2026 as a year that will test whether crypto markets can keep scaling under more disciplined conditions instead of relying on loose credit and unchecked leverage. After the late-2025 drawdown, leverage metrics in derivatives fell sharply, yet daily participation in perpetual futures, prediction markets and stablecoin transfers remained relatively firm. That pattern supports the idea that the market shed some of its more fragile structures while retaining the base of users who actually rely on the system for trading, hedging and settlement. Coinbase expects that further growth will depend less on adding new speculative assets and more on strengthening processes such as risk controls, margin standards and liquidity management. Institutional participation forms a crucial part of this test. Traditional cycle models emphasized retail speculation and token launches as key drivers, but the authors argue that these patterns explain less of the variance in price behavior as professional desks gain influence. Institutions tend to care more about execution quality, clearing, collateral management and counterparty risk than about short-term narratives, so they judge venues by how well they handle stress events. If markets demonstrate that they can manage liquidations, funding swings and large transfers without cascading failures, then these participants may feel more comfortable deploying long-term capital. Coinbase therefore positions market structure, not storytelling, as the main variable that will determine how the next cycle unfolds. Another axis of the stress test sits in the links between the three pillars. Perpetual futures depend on stable liquidity that often uses stablecoins as collateral, while prediction markets draw on the same user base and infrastructure that serves derivatives and payments. Weakness in one area can spill into the others, but strength can also reinforce the system as a whole. For example, robust stablecoin settlement can help traders move collateral quickly in response to margin calls, which reduces the chance of disorderly liquidations in futures markets. At the same time, deeper prediction markets can offer better signals about upcoming events, which traders then use to adjust positioning in derivatives before shocks materialize. Coinbase highlights this interdependence to show that 2026 will not simply measure headline prices, but rather the resilience of the entire network of markets and payment rails that support them.
Conclusion
The outlook presents a crypto landscape where activity concentration and risk management take priority over simple narrative momentum, and Coinbase places perpetual futures, prediction markets and stablecoin-driven payments at the center of that shift. Derivatives already account for most trading volume, and the sharp reduction in leverage during late 2025 appears more like a reset than a lasting retreat, with tighter margin practices and better controls shaping trading conditions. Prediction venues gain depth and start to resemble standard financial tools instead of experiments, while stablecoin transactions for settlement, cross-border transfers and liquidity management keep climbing as a practical link to the real economy. Whether 2026 confirms this trajectory will depend on how well these markets handle stress, attract institutions and maintain disciplined growth, but the report leaves little doubt that the structure described here will guide crypto long after the current cycle fades from view.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
Featured image created by AI
