Q1 Market Review: Traditional Assets Enter the Blockchain Era; Geopolitical Turbulence Puts Pressure on the Cryptocurrency Market
Original Title: Q1 2026 Review: Crypto Markets Reset as Traditional Assets Go 24/7
Original Author: Tanay Ved, Coin Metrics
Translated by: Chopper, Foresight News
TL;DR
· Amid macroeconomic and geopolitical turbulence, the crypto market remained under pressure, but ETF demand improved gradually this quarter, providing support for Bitcoin's current price.
· On-chain trading platforms and asset tokenization further facilitated the entry of traditional assets into 24/7 trading with platforms like Hyperliquid launching stock and index perpetual contracts, along with mainstream exchanges introducing stock perpetual products, driving the steady growth of open interest.
· The total stablecoin supply remained around $300 billion, with the first quarter of 2026 seeing a rise in transaction volume to around $21.5 trillion post-adjustment; regulatory policies related to stablecoin revenue and issuance have gradually become clearer, continuing to impact the industry's development.
The first quarter of 2026 has come to a close, marking a key moment to review the development dynamics and key themes of the crypto market. This quarter, amid geopolitical and macroeconomic uncertainties, the market exhibited a risk-off, high-volatility nature. Despite challenges faced by the crypto market, with the total market capitalization falling by around 22%, areas such as tokenized stocks and on-chain trading of traditional assets stood out as industry highlights, with significant progress made in industry infrastructure. This article will review the first quarter of 2026, dissecting the trends and key themes that shaped the market in that quarter.
Market Performance
In February, Bitcoin's price dropped over 30% from around $95,000, resulting in a 22% year-to-date decline. Apart from macroeconomic pressures, a general sell-off of risk assets and derivatives market liquidation exacerbated the downturn, reigniting discussions about Bitcoin's safe haven properties and store of value function.
However, since the outbreak of the Iran conflict on February 28, Bitcoin has shown more strength compared to stocks and gold, demonstrating some resilience and signs of demand recovery.

Data Source: Coin Metrics and Google Finance
The performance of crypto assets has shown significant differentiation internally, with only a few meme coins demonstrating strong narratives and real-world adoption outperforming the market.
Notable performers include Hyperliquid (HYPE), Bittensor (TAO), and Morpho (MORPHO), all seeing quarterly gains of over 30%. Hyperliquid benefited from the HIP-3 market's growth (especially in the commodities and stock index categories), expanding its business scope from crypto assets to more asset classes; Bittensor and Morpho leveraged the growth in AI infrastructure and decentralized finance credit markets, with institutional interest in decentralized AI and treasury management businesses continuing to rise.

Data Source: Coin Metrics
Bitcoin Demand Slowly Stabilizing
Early in the quarter, risk-off sentiment reversed in March. Despite lingering market weakness, demand for Bitcoin spot ETFs significantly improved, reversing the trend of continuous outflows since November 2025. Rolling 30-day data shows net inflows into ETFs exceeding 30,000 BTC, supporting Bitcoin's consolidation around $70,000.

Data Source: Coin Metrics Network
The sustainability and acceleration of this demand largely depend on the macro environment and policy direction. Geopolitical risks easing, inflation slowing, rate cut expectations returning, and the continued growth in ETF and Digital Asset Treasury (DAT) allocations (including a $42 billion Bitcoin fundraising plan by institutional strategies), are all poised to further consolidate inflows.
Round-the-Clock On-Chain Markets and Tokenized Stocks
Hyperliquid and Traditional Asset Race
One of this year's core trends is the fusion of traditional financial markets with on-chain infrastructure through asset tokenization and round-the-clock trading acceleration. The growth of perpetual contracts for traditional asset classes is the most tangible manifestation of this trend.
Following the launch of the HIP-3 market covering categories such as stocks, indices, and commodities, Hyperliquid saw the non-crypto asset trading volume share increase significantly to about 45% this quarter. Amid geopolitical conflicts, traders sought round-the-clock exposure to metals, oil, and other assets, leading to significant growth in overall platform trading volume and open interest contracts; among them, traditional asset open interest contracts in HIP-3 accounted for approximately 28% of the platform's total.

Data Source: Coin Metrics
The Rise of Stock Perpetual Contracts
In this subsector, as trading platforms continue to expand their businesses, mainstream stocks and index products have become the fastest-growing category. Kraken launched xStocks stock perpetual contracts in February, and Coinbase's international site introduced stock perpetual products, providing investors with exposure to U.S. stocks with leverage.
At the same time, the largest HIP-3 deployment partner of Hyperliquid [XYZ] collaborated with S&P Dow Jones Indices to launch the first official S&P 500 perpetual contract, further enriching the global stock exposure trading market.

Data Source: Coin Metrics
The open interest of stock and index perpetual contracts on Hyperliquid has been steadily increasing, with core indices such as XYZ100 (Nasdaq 100) and the S&P 500 ranking among the platform's largest open interest trading categories, and individual stocks such as Nvidia (NVDA) and Micron Technology (MU) also providing significant liquidity.
Meanwhile, tokenized stocks and fund issuance have grown in parallel, from frameworks like xStocks to institutions issuing tokenized currency market funds and stock funds on Ethereum and Solana, showing a growth trend.
The growth of tokenized stocks and Real World Asset (RWA) perpetual contracts confirms a trend: on-chain platforms are gradually becoming a round-the-clock extension of traditional markets, rather than just crypto-native trading venues.
Stablecoins: Stable Supply, Increasing Utility
Stablecoins continue to play a role as the foundation of on-chain liquidity. Despite an overall market decline, the total supply of stablecoins remained stable around $300 billion in the first quarter of 2026, with a slight increase in supply growth on February 30.
The most prominent growth in stablecoins is seen in USDS, which is a dollar-pegged stablecoin issued by Sky Protocol (formerly MakerDAO) collateralized by crypto assets and Real World Assets, with a supply growth of 43% to around $8 billion; Circle's USDC has reached a scale of $77 billion, while USDT remains stable at around $184 billion.

Data Source: Coin Metrics
While supply remains stable, the circulation speed and usage of stablecoins have increased significantly. In the first quarter, the adjusted total transfer volume of stablecoins reached $21.5 trillion, about three times that of the same period in 2025. Over 80% of the transaction volume came from USDC, whose transaction usage share continues to expand compared to USDT. This high level of activity is mainly driven by USDC on the Base chain, with the transfer volume on that chain alone reaching $13 trillion in the first quarter.
As we analyzed in a recent report, a large part of this fund flow comes from DeFi infrastructure activities such as liquidity provider rebalancing and flash loans, rather than end-user payments or settlements, although the latter scenario is also growing concurrently.

Data Source: Coin Metrics
In the future, the direction of the stablecoin industry may depend on the revenue mechanism and issuance rules. The latest draft of the "CLARITY Act" proposes to prohibit passive income generation from stablecoin balances but allows for activity-based rewards linked to payments and platform usage. This provision may alter the business models of key stakeholders.
For Coinbase, where stablecoin revenue accounts for over 25% of total revenue, restricting USDC income could weaken its ability to attract and retain funds; Circle, on the other hand, is relatively less affected, and if the high-interest-rate environment persists and regulatory rules are clear, its payment- and transaction-related revenue may benefit. As the bill progresses, its impact on DeFi lending, yield-generating stablecoins, tokenized government bonds, and other areas is worth monitoring.
U.S. SEC Releases Digital Asset Classification Framework
This quarter saw a significant clarification on the regulatory front. The U.S. SEC and the Commodity Futures Trading Commission (CFTC) jointly released an interpretation document introducing a five-category digital asset classification framework and clarifying the positioning of each type of asset under existing securities and commodities regulations:
· Digital Commodities: Core network-native tokens whose value primarily relies on cryptographic system functionality and market supply and demand (such as mainstream public chain tokens), classified as commodities rather than securities.
· Digital Collectibles and Tools: NFTs, In-Game Assets, Gas Fee Tokens, Access Rights Tokens, generally not subject to securities rules unless fractionalized or primarily marketed as investment vehicles.
· Payment Stablecoins: Fiat-backed or real-world asset-backed payment stablecoins are considered a form of monetary tool, but variants with yield or non-compliant design still need to undergo securities identification.
· Digital Securities: Tokenized stocks, bonds, real-world asset-backed securities, and similar tools, whether on or off-chain, all fall squarely within the securities category. Staking, Mining, Wrapping: Native staking, mining, airdrops, and wrapping activities do not constitute securities transactions, but pooled staking, yield wrapping/structured tokens that offer investors return commitments could potentially be deemed investment contracts.
If you want to delve deeper into the new token classification framework, progress on the CLARITY Act negotiations, and global regulatory trends, you can refer to Talos's latest release of the Regulatory Roundup.
Conclusion
Despite cryptocurrency prices still being significantly impacted by macro and geopolitical factors, the industry's underlying infrastructure continues to evolve. Bitcoin is gradually gaining support at current price levels, and on-chain platforms are further penetrating into the all-weather trading market of stocks, commodities, and real-world assets.
Meanwhile, traditional giants like the NYSE and NASDAQ are actively entering the tokenization space, driving the modernization of the stock trading ecosystem. The progress of the CLARITY Act and regulatory policies related to stablecoin yields will become key variables for the industry; if the macro environment improves, the risk appetite for cryptocurrency assets is expected to gradually recover.
You may also like

Consumer-grade Crypto Global Survey: Users, Revenue, and Track Distribution

Prediction Markets Under Bias

Stolen: $290 million, Three Parties Refusing to Acknowledge, Who Should Foot the Bill for the KelpDAO Incident Resolution?

ASTEROID Pumped 10,000x in Three Days, Is Meme Season Back on Ethereum?

ChainCatcher Hong Kong Themed Forum Highlights: Decoding the Growth Engine Under the Integration of Crypto Assets and Smart Economy

Why can this institution still grow by 150% when the scale of leading crypto VCs has shrunk significantly?

Anthropic's $1 trillion, compared to DeepSeek's $100 billion

Geopolitical Risk Persists, Is Bitcoin Becoming a Key Barometer?

Annualized 11.5%, Wall Street Buzzing: Is MicroStrategy's STRC Bitcoin's Savior or Destroyer?

An Obscure Open Source AI Tool Alerted on Kelp DAO's $292 million Bug 12 Days Ago

Mixin has launched USTD-margined perpetual contracts, bringing derivative trading into the chat scene.
The privacy-focused crypto wallet Mixin announced today the launch of its U-based perpetual contract (a derivative priced in USDT). Unlike traditional exchanges, Mixin has taken a new approach by "liberating" derivative trading from isolated matching engines and embedding it into the instant messaging environment.
Users can directly open positions within the app with leverage of up to 200x, while sharing positions, discussing strategies, and copy trading within private communities. Trading, social interaction, and asset management are integrated into the same interface.
Based on its non-custodial architecture, Mixin has eliminated friction from the traditional onboarding process, allowing users to participate in perpetual contract trading without identity verification.
The trading process has been streamlined into five steps:
· Choose the trading asset
· Select long or short
· Input position size and leverage
· Confirm order details
· Confirm and open the position
The interface provides real-time visualization of price, position, and profit and loss (PnL), allowing users to complete trades without switching between multiple modules.
Mixin has directly integrated social features into the derivative trading environment. Users can create private trading communities and interact around real-time positions:
· End-to-end encrypted private groups supporting up to 1024 members
· End-to-end encrypted voice communication
· One-click position sharing
· One-click trade copying
On the execution side, Mixin aggregates liquidity from multiple sources and accesses decentralized protocol and external market liquidity through a unified trading interface.
By combining social interaction with trade execution, Mixin enables users to collaborate, share, and execute trading strategies instantly within the same environment.
Mixin has also introduced a referral incentive system based on trading behavior:
· Users can join with an invite code
· Up to 60% of trading fees as referral rewards
· Incentive mechanism designed for long-term, sustainable earnings
This model aims to drive user-driven network expansion and organic growth.
Mixin's derivative transactions are built on top of its existing self-custody wallet infrastructure, with core features including:
· Separation of transaction account and asset storage
· User full control over assets
· Platform does not custody user funds
· Built-in privacy mechanisms to reduce data exposure
The system aims to strike a balance between transaction efficiency, asset security, and privacy protection.
Against the background of perpetual contracts becoming a mainstream trading tool, Mixin is exploring a different development direction by lowering barriers, enhancing social and privacy attributes.
The platform does not only view transactions as execution actions but positions them as a networked activity: transactions have social attributes, strategies can be shared, and relationships between individuals also become part of the financial system.
Mixin's design is based on a user-initiated, user-controlled model. The platform neither custodies assets nor executes transactions on behalf of users.
This model aligns with a statement issued by the U.S. Securities and Exchange Commission (SEC) on April 13, 2026, titled "Staff Statement on Whether Partial User Interface Used in Preparing Cryptocurrency Securities Transactions May Require Broker-Dealer Registration."
The statement indicates that, under the premise where transactions are entirely initiated and controlled by users, non-custodial service providers that offer neutral interfaces may not need to register as broker-dealers or exchanges.
Mixin is a decentralized, self-custodial privacy wallet designed to provide secure and efficient digital asset management services.
Its core capabilities include:
· Aggregation: integrating multi-chain assets and routing between different transaction paths to simplify user operations
· High liquidity access: connecting to various liquidity sources, including decentralized protocols and external markets
· Decentralization: achieving full user control over assets without relying on custodial intermediaries
· Privacy protection: safeguarding assets and data through MPC, CryptoNote, and end-to-end encrypted communication
Mixin has been in operation for over 8 years, supporting over 40 blockchains and more than 10,000 assets, with a global user base exceeding 10 million and an on-chain self-custodied asset scale of over $1 billion.

$600 million stolen in 20 days, ushering in the era of AI hackers in the crypto world

Vitalik's 2026 Hong Kong Web3 Summit Speech: Ethereum's Ultimate Vision as the "World Computer" and Future Roadmap

On the same day Aave introduced rsETH, why did Spark decide to exit?

Full Post-Mortem of the KelpDAO Incident: Why Did Aave, Which Was Not Compromised, End Up in Crisis Situation?

After a $290 million DeFi liquidation, is the security promise still there?

ZachXBT's post ignites RAVE nearing zero, what is the truth behind the insider control?


