A glimmer of hope amid market panic: Grayscale report states quantum computing will not affect the 2026 crypto market

The cryptocurrency market is experiencing a tough December. As of December 16, the Fear and Greed Index shows a reading of 21, indicating that market sentiment remains firmly in the “Fear” zone.

According to Gate data, Bitcoin (BTC) is priced at $86,500, Ethereum (ETH) at $2,945, while Gate platform token (GT) remains relatively resilient at $10.3.

Amidst the gloom cast over the market, the world’s largest digital asset management firm Grayscale released its “2026 Digital Asset Outlook Report,” injecting a dose of rational optimism into the market.

The report clearly states that long-term technological threats such as quantum computing will not impact cryptocurrency valuations in 2026. The focus should return to fundamental narratives like institutional capital inflows and regulatory clarity.

01 Market Winter

Currently, the market is dominated by strong risk-averse sentiment. On December 16, the crypto market broadly declined, with Bitcoin briefly falling below the critical psychological level of $86,000, and Ethereum also slipping below $3,000.

According to BlockBeats, the cryptocurrency Fear and Greed Index has further dipped, indicating the market is in an “Extreme Fear” state.

Market analysis generally agrees that this decline was not triggered by any specific crypto market catalyst but was more synchronized with worsening risk sentiment in traditional financial markets.

As year-end liquidity dries up, any sell-offs could be amplified, leading to volatile price swings beyond fundamental values.

02 Grayscale’s Confidence Boost

Amid market unease, Grayscale’s December 15 annual outlook report clarifies the distinction between short-term volatility and long-term trends for investors.

One of the core conclusions is that some widely discussed threats, including quantum computing, are listed as “False Alarms” for 2026, and are not expected to impact asset prices next year.

Titled “The Dawn of the Institutional Era,” the report argues that the market in 2026 will be driven by two main pillars: the demand for alternative store of value driven by macro concerns over fiat devaluation, and institutional investment facilitated by regulatory clarity.

03 Postponed Quantum Threat

Quantum computers, due to their theoretically immense computing power, have long been considered potential “terminators” for elliptic curve cryptography relied upon by assets like Bitcoin. Such concerns are often raised in the market and can trigger panic.

Grayscale’s report acknowledges this threat but provides a clear timeline. It states that practical quantum computers capable of breaking current cryptography are still out of reach in the foreseeable future (especially in 2026).

The industry is not sitting idly. The report also notes that research and preparations for post-quantum cryptography are ongoing worldwide.

This means blockchain networks have sufficient time and pathways to upgrade algorithms to resist future quantum threats. For investors, this is an important clarification: quantum computing is a technological evolution to watch, not an imminent market “black swan.”

04 The True Mainline in 2026

So, apart from the long-term quantum threat, what is the real mainline of the market in 2026? Grayscale paints a picture led by institutional capital and clear rules.

The report predicts that legislation in the U.S. for a bipartisan crypto market structure is likely to become law by 2026, which will fundamentally change the game and pave the way for large-scale, compliant entry of traditional capital into digital assets.

The main channel for capital inflows will be spot exchange-traded products. Since the listing of Bitcoin spot ETFs in the U.S. in 2024, such products have continuously attracted massive net fund inflows.

Grayscale estimates that the proportion of crypto allocations within US advisory assets is less than 0.5%, leaving huge room for growth. As more major asset management platforms complete due diligence and incorporate crypto assets into their portfolios, slow but substantial institutional capital will serve as a “ballast” and upward driver for the market.

05 End of Cycles and New Beginnings

Grayscale’s report also challenges a widely-held narrative in the crypto market—the “Four-Year Cycle” theory.

This theory suggests that Bitcoin’s price peaks approximately 1 to 1.5 years after its halving events, followed by a bear market. The latest halving occurred in April 2024, and according to this theory, the market may already be at a cyclical top.

However, Grayscale believes that this time is entirely different. Steady buying by institutional investors has replaced the momentum trading of retail investors chasing highs and lows seen in past cycles, making price trends more stable.

Therefore, the report predicts that the market will continue to rise in 2026 and may well mark the end of the “Four-Year Cycle” pattern. Bitcoin prices are expected to hit new all-time highs in the first half of 2026.

Future Outlook

The market swings between fear and greed, but Grayscale’s report aims to cut through the fog, pointing toward a more certain future. While the Fear and Greed Index hovers in the panic zone at 21, the report predicts Bitcoin will reach new all-time highs in the coming months.

The shadow of quantum computing has been temporarily lifted, and the gates for institutional capital are slowly opening. Every panic-driven sell-off could become a strategic opportunity for institutional investors.