[DigitalToday reporter Yoonseo Lee] Asset manager 21Shares lowered some bullish forecasts for the crypto industry this year, despite a trend toward expanding institutional investment.

On June 25, local time, 21Shares said some 2026 targets have become harder to achieve due to market weakness and a slowdown in retail investor participation, Cointelegraph reported.

21Shares said industry infrastructure has developed faster than price action. It said areas such as exchange-traded funds (ETFs), stablecoin regulation, tokenisation and prediction markets continued to mature, but weak crypto prices, decentralised finance (DeFi) hacks and slower-than-expected corporate adoption made it difficult to maintain its previous outlook.

One key conclusion in the report is that bitcoin's four-year market cycle remains valid. 21Shares analysts said bitcoin rose to about $126,000 in October 2025 before a sharp pullback, and has continued to follow a pattern similar to past post-halving moves. They said rising institutional holdings may have softened the decline, but did not change the cyclical structure itself.

The assessment also ties in with observations that institutionalisation is changing the market's character. Ophelia Snyder, who left the company after 21Shares was acquired by FalconX in 2025, said recently on Substack that the investor base has not only expanded but become more institutional, and is becoming connected to a broader financial system. She said competing narratives, geopolitical variables and macroeconomic changes are having a much bigger impact on crypto prices than in the past.

Prediction markets were cited as a sector exceeding expectations. 21Shares forecast annual trading volume in prediction markets will exceed $100 billion this year, while saying consolidation has become clear across the industry. It said gaps are widening among listed companies that put crypto on their balance sheets, and some small treasury-holding firms are trading at prices below the value of the digital assets they hold.

A similar trend was seen in the Ethereum layer-2 ecosystem. A small number of major rollups are expanding their market share, while many smaller networks are failing to attract meaningful users and liquidity.

The support from institutional money was also visible in crypto exchange-traded products (ETPs). U.S. spot bitcoin ETFs recorded about $3 billion in net outflows this year, but total holdings remain just above 1.25 million BTC and still near record highs. That suggests investors are either holding through volatility or building strategic positions at levels below bitcoin's peak, it said.

On regulation, 21Shares mentioned the U.S. Securities and Exchange Commission's efforts to streamline general listing standards. It said the move is helping ease a backlog of crypto ETF applications, while the steady launch of new products beyond bitcoin and Ethereum continues.

Hyperliquid stood out as an individual asset case. 21Shares analysts said Hyperliquid's growth is notable and that a spot ETF tracking it drew net inflows of more than $150 million in less than a month. They said it was a sign traditional capital is still flowing into digital assets.

Ultimately, 21Shares' adjustment is closer to recalibrating expectations for the pace of price and demand recovery than to a slowdown in institutional adoption. Infrastructure and the regulatory environment continue to improve, but the speed of market expansion and the structure of capital concentration are becoming more clearly split by sector, it said.