Fidelity’s latest quarterly crypto livestream featured the second quarter of 2026 as a turning point for crypto assets, with the firm’s speakers pointing to a mix of major, regulatory, and on-chain developments that could shape the next phase of the market. The discussion focused on the current consolidation of bitcoin, the growing role of stablecoins, and whether smart contract platforms can gain new momentum through the use of tokens and AI-driven developer productivity.
Crypto Outlook for Q2 2026
Jurrien Timmer, Fidelity’s director of global macro, described the recent selloff as a “cool winter” rather than the kind of crypto washout seen in previous cycles. Bitcoin, which he said peaked at $126,000 before falling to around $60,000, has already endured a decline of more than 50%, but he argued that such declines should worsen as the asset matures.
“I’m not looking at an 80% drop, which would be a tough winter,” Timmer said. “I think a 50% to 60% drop, which is what we’ve had, is about as much as it should go. Again, not timing the market here, but I think we’re in the zone. So, a mild winter, but maybe spring is around the corner.”
That idea ties into Fidelity’s broader debate about whether bitcoin’s four-year cycle has changed. Max Wadington of Fidelity Digital Assets said Q1 is likely to confirm the timing of the cycle, given that the previous peak in November 2021 is closely aligned with the market peak in late 2025. But both speakers argued that the cycle path is changing as the half is important and the desired features are becoming more important.
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For Timmer, the current setup is less about breaking new ground than a foundation-building phase. He said bitcoin seems to be testing the range around $60,000 to $70,000 while the market is looking for a new story after both “hard currency” and speculative trading have lost momentum.
“We’ve done a hard money story. Gold is running the show right now. We’ve had a speculative narrative,” Timmer said. “And so I think it’s sitting here waiting for a new story, if you will. It’s still going to be related to those two. But something has to happen.”
Another factor that can have an impact is macro policy. Timmer said he is watching the upcoming leadership changes at the Federal Reserve closely, arguing that closer alignment between the Fed and the Treasury in managing the debt burden could ultimately revive the case for the hard currency bitcoin if markets begin to question the independence of the central bank. According to him, gold has already responded to that issue, while bitcoin has already.
A macro image is not one-dimensional, however. Timmer said that bitcoin is currently caught between two identities: an “aspirational store of value” tied to currency declines and a speculative asset that often trades in tandem with technical risk.
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He pointed to a disconnect between global currency growth, which he puts at about $120 trillion and an increase of about 12% year-on-year, and bitcoin’s recent weak performance. At the same time, he noted that software stocks have been under pressure, and bitcoin has moved more in that direction than with hard currency assets.
Wadington’s Q2 focus remains very low. He highlighted tokens, DeFi, and stablecoins as major themes that are gaining momentum, especially after Fidelity Digital Assets launched its dollar-backed stablecoin, FIDD. He stressed that stablecoins should not be considered long-term investments as on-chain financial instruments designed for around-the-clock, low-cost global transfers.
More interestingly, he said that the next leg of Ethereum and Solana may not only come from AI agents that use the chain, but from AI that makes crypto developers more productive in the near future.
“What I’m looking for are any signs or signals that show the thousands of crypto developers getting less or more productive,” Wadington said. “And I think that’s going to have a direct impact on the underlying value of these assets. I personally don’t think it’s something that’s been talked about that we’re going to see coming out of the metrics anytime soon here.”
At the time of publication, the total crypto market stood at $2.41 trillion.
The featured image was created with DALL.E, a chart from TradingView.com
