Two key factors to watch in Q1/2026:
1. Interest rate cut trajectory
Currently, the market believes the Fed will keep interest rates unchanged at the January FOMC meeting, while the outlook for March is evenly split between two scenarios: no cut and a 0.25% cut.
The optimistic scenario is that the market gradually leans toward the possibility of two or more interest rate cuts of 0.25%. This is because, as expectations of interest rate cuts increase, the price of Bitcoin tends to react positively. This correlation was quite evident in the period leading up to the interest rate cut decision last December.
2. Market Structure Bill
Currently, the legal framework for institutional capital flows in the US crypto sector remains unclear. This leads large institutions to primarily allocate capital through ETFs, rather than investing directly in tokens.
The Market Structure Bill is expected to clarify the "rules of the game," defining how institutions can participate in investing across the entire crypto market. Once regulations are established, large capital flows will have a basis for inflow.
Based on reliable timelines, this bill is likely to be passed only in mid-2026. However, the market always tends to anticipate expectations. Any positive developments regarding the bill could lead investors to anticipate future price increases, thereby driving up crypto prices before the law officially takes effect.
In the long term, this law is seen as a crucial catalyst, helping to shift the balance of capital allocation towards institutional investors – a key resource behind major market growth cycles.
