Key Highlights
- Bitwise says crypto fundamentals improved despite a 36% decline in crypto asset prices during H1 2026.
- Crypto applications generated nearly $5.9 billion in annualized revenue, led by PancakeSwap, Hyperliquid, and Aave.
- Tokenized real-world assets (RWAs) reached a record $33 billion, up 45% year-to-date.
- Prediction market trading volume climbed to $43 billion during Q2, with sports becoming the largest category.
Crypto asset prices declined sharply during the first half of 2026, but Bitwise says the broader industry continued making progress beneath the surface.
In a Crypto Market Review for Q2 of 2026 published on Tuesday, the asset manager identified five trends it believes are driving the next phase of digital asset adoption.
According to Ryan Rasmussen, Bitwise’s Head of Research, investors focusing only on token prices risk overlooking structural changes taking place across the industry. He wrote, “There are bull markets everywhere for those with the eyes to see.”
While crypto assets fell roughly 36% during the first half of 2026, Rasmussen said institutional adoption, tokenization, application revenue, and on-chain financial activity continued to expand.
Crypto stocks beat digital assets
One of Bitwise’s key observations was the growing divergence between crypto assets and crypto-related equities. While major cryptocurrencies struggled during the first six months of the year, publicly listed companies tied to the crypto ecosystem delivered much stronger performance.
According to Bitwise, crypto equities gained approximately 23% during H1 2026, outperforming nearly every traditional asset class except emerging market equities. The firm said companies involved in Bitcoin mining, stablecoins, tokenization infrastructure, and blockchain financial services continued to benefit from institutional demand even as broader crypto markets weakened.
Rasmussen added that crypto should increasingly be viewed as multiple sectors rather than a single investment category.
Crypto applications generated nearly $6 Billion in revenue
Bitwise also highlighted continued growth in blockchain-based applications.
According to data cited in the report, the 10 largest crypto applications generated approximately $5.9 billion in combined revenue over the past twelve months. PancakeSwap, Hyperliquid, and Aave each produced nearly $1 billion in annualized revenue, demonstrating that decentralized applications continue generating meaningful cash flows despite weaker token prices.
The figures reinforce the growing importance of protocol revenue as an indicator of long-term ecosystem health.
Tokenized assets continue breaking records
Bitwise identified tokenization as one of the strongest structural trends across digital assets. The report shows tokenized real-world assets (RWAs) reached a record $33 billion during the second quarter, representing 12% quarterly growth and 45% growth since the beginning of 2026.
The expansion has been driven by increasing adoption of tokenized U.S. Treasuries, private credit, corporate debt, equities, and venture capital funds. The report arrives as traditional financial institutions continue accelerating tokenization efforts.
Earlier today, DTCC launched a real-world asset (RWA) tokenization pilot alongside major Wall Street firms, including JPMorgan, Goldman Sachs, BlackRock, Vanguard, and the New York Stock Exchange. The initiative follows several months of infrastructure development, including DTCC’s partnership with Chainlink for blockchain-based collateral management and earlier plans to tokenize selected custodial assets.
According to Rasmussen, institutional adoption increasingly reflects a broader shift toward blockchain-based capital markets.
Prediction markets hit new highs
Bitwise also pointed to continued expansion in prediction markets. According to the report, prediction market open interest reached a record $1.8 billion, while quarterly trading volume climbed to $43 billion.
Sports contracts have now become the largest category, accounting for approximately 65% of trading activity.
The findings come as institutional interest in prediction markets continues to accelerate. Recent developments include Payward’s investment in Onyx Odds, ongoing expansion by Kalshi and Polymarket, and increasing attention from regulators as prediction markets move beyond politics into sports, finance, and economic forecasting.
Rasmussen argued that many users increasingly interact with blockchain infrastructure without necessarily realizing it.
“Millions of people are using crypto rails to trade on real-world outcomes, but most of them don’t know or care that crypto provides the underlying technology,” he added.
Stablecoins and tokenization continue reshaping finance
Beyond individual market sectors, Bitwise said tokenization and stablecoins continue driving broader financial transformation.
Earlier this week, Coinbase Chief Policy Officer Faryar Shirzad similarly argued that tokenization is changing how financial assets are created, transferred, and owned, describing Coinbase’s long-term vision as becoming an “everything exchange” capable of offering tokenized equities, payments, stablecoins, and crypto through a single platform.
Meanwhile, stablecoin adoption has continued expanding globally through initiatives such as the newly launched x402 Foundation, backed by Circle, Coinbase, Stripe, Visa, Mastercard, AWS, Google, Ripple, Shopify, Solana Foundation, and other major technology and financial firms to standardize internet-native payments for AI agents and applications.
Why Bitwise remains bullish
Despite continued price weakness, Bitwise believes the industry’s underlying trajectory remains intact.
Rather than focusing solely on market cycles, the firm argues investors should pay closer attention to metrics such as protocol revenue, tokenized asset growth, institutional adoption, and real-world blockchain usage.
“As institutions move assets on-chain and real-world adoption continues expanding, the next crypto cycle may be built less on speculation and more on financial infrastructure,” Rasmussen concluded.
Also Read: Strategy Unveils Bitcoin Banking Adoption Index With 32% Score
