Coinbase’s 2026 Crypto Outlook: The Forces That Will Define the Market w/ David Duong

Watch on YouTube ↗  |  January 01, 2026 at 19:45  |  32:55  |  Milk Road Daily
Speakers
David Duong — Head of Institutional Research, Coinbase

Summary

David Duong, Head of Institutional Research at Coinbase, walks through Coinbase's 2026 Crypto Market Outlook. He lays out a constructive first-half 2026 macro and liquidity backdrop for crypto, improving regulation and ETF access, and themes including DAT 2.0, AI crypto, RWAs/tokenized equities, prediction markets, and crypto payments. He also highlights relative shifts such as altcoins benefiting more than Bitcoin from market-structure clarity and prediction markets potentially taking share from traditional gambling. The discussion remains largely thematic and institutional-flow focused.

  • Coinbase's 2026 outlook is constructive on crypto/risk assets in H1 2026, supported by Fed cuts and underappreciated AI-driven productivity.
  • Global M2/liquidity should inflect higher, with sidelined capital potentially moving from low-yield savings/money markets into crypto.
  • Regulatory market-structure progress and faster ETF approvals could especially benefit altcoins and crypto ETF flows.
  • DATs may evolve into a DAT 2.0 model focused on sovereign block space as a commodity.
  • AI x crypto, AI agents, decentralized compute, RWAs/tokenized equities, and equity perps are identified as emerging themes.
  • Prediction markets have the strongest growth potential, with regulatory tax changes potentially shifting flows away from traditional gambling.
  • Crypto payments and token-sale infrastructure could broaden online commerce and market access.
  • David expects both crypto perps and prediction markets to grow, though prediction markets have more upside.
Ideas
David Duong Head of Institutional Research, Coinbase 11:35
Regulation boosts altcoins over Bitcoin.
Regulatory conditions should improve as the Senate works on a market-structure counterpart to the CLARITY Act, with reconciliation possibly in January and a bill on Trump's desk in Q1. This is more helpful for altcoins than Bitcoin because Bitcoin already has commodity clarity, while altcoins could gain fee switches, tokenomics changes, and buy-and-burn/financial engineering.
ALTCOINS HIGH
David Duong Head of Institutional Research, Coinbase 13:16
ETF access drives crypto prices higher.
The SEC cut ETF approval time from 270 days to 75 days when an existing futures market exists, and many altcoins already have Coinbase futures. Vanguard, Bank of America, and other private wealth platforms are opening crypto ETF access, so more institutional money can flow into the space and that should be very good for price.
Crypto ETFs HIGH
David Duong Head of Institutional Research, Coinbase 15:45
DATs iterate into blockspace commodity model.
DATs are not going away but will iterate into a DAT 2.0 model: professional trading/storage procurement of sovereign block space as block space becomes a valuable commodity for stablecoin payments and tokenized equities. This resembles commodity trading firms like Cargill or Trafigura, which hedge natural exposure and then speculate on forward curves.
DATS MED
David Duong Head of Institutional Research, Coinbase 17:57
AI crypto theme survives and emerges.
AI x crypto got a bad rap and some projects were cash grabs, but the underlying themes remain hugely important: AI agents, microtransactions, decentralized identity, and decentralized compute. Coinbase's X42 enables AI-agent microtransactions, and while real winners may take two to three years to emerge, the theme starts now and is worth watching.
AI-SECTOR MED
David Duong Head of Institutional Research, Coinbase 18:24
AI agents enable new crypto commerce.
AI agents had a brief 2024-early-2025 cycle but remain important because crypto wallets and protocols like X42 allow agents to do microtransactions and settle payments, creating new forms of online commerce where agents can pay on behalf of users.
AI agents MED
David Duong Head of Institutional Research, Coinbase 20:04
Decentralized compute democratizes AI access.
Decentralized compute remains important because it democratizes AI access for a large part of the population, even though the theme took a back seat after earlier hype.
Decentralized compute MED
David Duong Head of Institutional Research, Coinbase 23:14
RWAs stand out most in crypto.
Among privacy, app-specific chains, and RWAs, RWAs stand out most because tokenized equities are becoming a much bigger part of the tokenization platform. More movement is coming from native tokenization and capital-efficient on-chain finance, which should drive more traffic.
RWAs MED
David Duong Head of Institutional Research, Coinbase 23:22
Native tokenized equities gain traction.
Native tokenization of equities is starting to become a thing. Many current on-chain equity products are derivatives and do not capture value one-to-one with the underlying stock, but native tokenization can give actual stock access and support more retail participation.
Tokenized Equities MED
David Duong Head of Institutional Research, Coinbase 24:00
Equity perps grow on leverage demand.
Equity perpetual futures should become more prominent as retail wants capital-efficient leveraged exposure. Crypto can support 75-80% loan-to-value versus about 50% in TradFi because settlement is near-atomic/instant rather than T+1/T+2, enabling more traffic.
Equity perpetual futures MED
David Duong Head of Institutional Research, Coinbase 25:55
Prediction markets lead derivative growth.
Prediction markets have the most growth potential in 2026, although both prediction markets and crypto perpetual futures should grow substantially. The One Big Beautiful Bill caps gambling-loss offsets at about 90%, making traditional gambling less tax-efficient while prediction markets are derivative-based rather than gambling; flows could shift toward prediction markets. A later development could be prediction-market aggregators that consolidate liquidity and standardize questions.
PREDICTION MARKETS Crypto perpetual futures HIGH
David Duong Head of Institutional Research, Coinbase 27:03
Gambling platforms lose tax efficiency.
The One Big Beautiful Bill limits gambling-loss offsets to about 90% instead of 100%, making traditional gambling less tax-efficient. Since prediction markets are derivative-based rather than gambling, capital could flow toward prediction markets and away from traditional gambling platforms.
BETZ MED
David Duong Head of Institutional Research, Coinbase 30:32
Crypto payments become major theme.
Payments should be a hugely meaningful 2026 theme. X42 and microtransactions make it easier for AI agents to pay on users' behalf, creators can build real online platforms, and previously impossible transactional commerce and capital formation can now be prompted and settled on-chain.
Crypto payments MED
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This Milk Road Daily video, published January 01, 2026, features David Duong discussing ALTCOINS, Crypto ETFs, DATS, AI-SECTOR, AI agents, Decentralized compute, RWAs, Tokenized Equities, Equity perpetual futures, PREDICTION MARKETS, Crypto perpetual futures, BETZ, Crypto payments. 12 trade ideas extracted by AI with direction and confidence scoring.

Speakers: David Duong  · Tickers: ALTCOINS, Crypto ETFs, DATS, AI-SECTOR, AI agents, Decentralized compute, RWAs, Tokenized Equities, Equity perpetual futures, PREDICTION MARKETS, Crypto perpetual futures, BETZ, Crypto payments