The S&P 500 is up about 24% during the past 12 months. Bitcoin (BTC +0.10%) is down 40% in the same period. Meanwhile, the rest of the crypto sector has been a graveyard for capital. Investors who bought a plain index fund in June 2025 made money; holders of "digital gold" did not, and holders of altcoins were quite likely to have lost almost everything.
In the longer view, some original investment theses for buying crypto still hold, while many (most?) others have been bludgeoned into irrelevance by hard evidence, courtesy of the market. So, is there any reason left to buy cryptocurrency in 2026, or is this show over for good?
Image source: Getty Images.
When the wheels fell off the car
Crypto's hard times started with the flash crash on Oct. 10, and practically none of the major currencies have recovered since then. Leading coins like XRP (XRP +0.08%), Ethereum (ETH -0.01%), and Solana (SOL +0.21%) have taken an absolute shellacking. Take a look at this chart:
But the outlook for the coming period could be even more pessimistic.
After more than a decade of existing as an industry, the most commercially successful crypto applications by revenue generated are still largely venues for investors to speculate or outright gamble, which is a significant problem when the decision to invest in either crypto or equities increasingly comes down to crypto's promises of higher returns versus equity earnings. As for most of the biggest coins by market cap, there simply hasn't been a strong relationship between their financial metrics and returns for holders due to tokenomics that lack a mechanism for holders to capture any of the value being generated.
CRYPTO: BTC
Key Data Points
On that note, Strategy just made its first stand-alone net Bitcoin sale, thereby retiring the reassuring certainty of the "never sell your Bitcoin" thesis behind its digital asset treasury model. That's one fewer major holder that can be counted on not to dump a coin whose price action ends up influencing everything else in the sector.
The macro picture is also unlikely to be supportive of higher crypto prices. The Federal Reserve, under its new Chair Kevin Warsh, may opt to hold interest rates higher for longer due to April's Consumer Price Index (CPI), which came in with a hot readout of 3.8%. If that happens, it will drain the liquidity that historically fed crypto rallies.
Geopolitics are another headwind. The U.S.-Israel war with Iran, now running past 90 days, has periodically disrupted oil transit through the Strait of Hormuz and kept Middle East risk premiums elevated, conditions that historically pull capital out of risk-on assets like crypto.
CRYPTO: ETH
Key Data Points
The surviving theses are few and far between
Two assets still have a mechanical reason to own them.
Bitcoin's scarcity, the basis for its value, is still intact. Its supply cap is still in force, its halvings will continue, and adoption by many types of actors, including countries and corporations, seems to be continuing apace. The main new vulnerability is the concentration of marginal demand; Strategy alone accounted for 97.5% of net new corporate Bitcoin purchases in January 2026, meaning that almost anything it does will move the market.
Separately, the decentralized financial derivatives exchange Hyperliquid is one of the very few tokens whose circulating supply is mechanically tied to its platform revenue, via a process that routes nearly all trading fees into open-market buybacks. Other than Hyperliquid, Ethereum and Solana have substantial ecosystems that are probably valuable, but neither has a clean, mechanism-driven case to hold over Bitcoin or Hyperliquid.
CRYPTO: SOL
Key Data Points
So for the moment, the takeaway here is that if you participate at all, evaluating cryptocurrency as a long-term holding means maintaining a small allocation of your overall portfolio, likely focusing on one or two defensible assets, and investing using disciplined dollar-cost averaging instead of a lump-sum entry.
There are still a few reasons to buy cryptocurrency in 2026. The list is just a lot shorter than it used to be.
