Hello readers,

Happy New Year, and welcome back for 2026. I hope everyone had a wonderful and restful holiday season.

While we were off (from writing) for a few weeks, the research didn’t stop. Now it’s time to get back to work. I hope you’re as fired up as I am for an exciting year ahead.

Without further ado, let’s hop into our outlook for 2026.

Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.

Let’s go.

Our Strategy

Before we hop into the 2026 setup, I wanted to share a quick overview of our investment strategy for newer members. Long-term readers can skip over this section.

Five Pillars:

Quantamentals approach. Our strategy is rooted in a framework that helps us understand Bitcoin’s “fair value.” We combine onchain and macro indicators to guide our view. It’s a disciplined, patient approach focused on data and conviction.
Macro overlay. Our crypto outlook is directly tied to our macro views across liquidity, growth, and the business cycle. We monitor 50+ data points & KPIs so that you don’t have to. If you don’t know your macro, you don’t know your crypto.
Long-term conviction. We believe BTC will ultimately achieve Gold’s market cap. We also believe that all of finance and global commerce will one day run on public blockchains. For this reason, we have no interest in shorting the market or being “delta neutral” while taking on counterparty risk. We are long-only.
Trade the “Big Cycle.” We position around the major liquidity cycles with large allocations into our core assets. We want to be greedy when others are fearful (‘22). And fearful when others are greedy (Q1-25, Q4-25). In 2022 these allocations included BTC, SOL, ETH, HOOD, and COIN.
“Rotate strategically within cycles.” We typically start a cycle in the bear market with a large allocation to Bitcoin — which tends to lead the next market expansion. As a wealth effect takes hold in BTC during bull market conditions, we tend to see capital rotate into altcoins. Our job is to conduct ongoing research to identify the correct assets before the rotations begin. Pro Members may recall our allocation into “risk-on” assets such as ENA (exited with 108% gain), PUMP (exited with 189% gain), GLXY (exited with 49% gain), and WLD (exited with 49% gain) in the summer of ‘25 as we outperformed BTC.

We have been in a risk-off stance since late September/early October of last year. This has allowed us to raise cash as we wait patiently for “fat pitches” (fair value + a positive outlook for risk assets).

We believe strongly in the power of market cycles. In crypto, this tends to revolve around narratives concerning the “4-year halving cycle.” With that said, we do not follow narratives. We’re simply following onchain data, market structure, sentiment, capital markets activity, and the macro cycle. This information, and how it reflexively builds on itself, informs our views as to “where we are in the cycle” — regardless of where that falls within the “4-year cycle.”

Crypto investors tend to anchor to the idea of “cycles.” But market cycles are not unique to the crypto asset class. In fact, traditional markets follow similar cycles pertaining to credit, market structure, capital markets activity, asset allocation, sentiment/investor psychology, and macro conditions. For those interested, we recommend Mastering the Market Cycle (a book we re-read over holiday break), by Howard Marks.

Finally, the core of our strategy for navigating markets is rooted in the mental models developed by investors such as Warren Buffett, Charlie Munger, George Soros, and Howard Marks. We seek to be endlessly curious, self-aware, and intellectually honest. We’ve designed The DeFi Report to align our incentives with you, the reader. We accomplish this with skin in the game, transparency, and a data-driven framework that anyone can follow.

With that, let’s hop into our views on the setup for 2026.

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Our Outlook for 2026

Risk-on or risk-off?

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