The Tokenization Supercycle: Bernstein Calls the Crypto Bottom as Wall Street Rewrites the 2026 Playbook

What if the most transformative shift in global finance isn't coming from Silicon Valley disruptors or crypto-native protocols—but from Wall Street itself? According to Bernstein, one of the most respected research firms on the Street, that shift is already underway. In early January 2026, the firm declared that digital assets have "likely bottomed" and that we're entering a "tokenization supercycle" that will fundamentally reshape how assets move, settle, and store value across the global financial system.

This isn't the usual crypto hype. When Bernstein—a firm that manages billions in traditional assets—says blockchain is "emerging financial infrastructure rather than speculative innovation," institutional money listens. And in 2026, that money is flowing.

From Pilot Programs to Production: The $80 Billion RWA Explosion

The tokenization of real-world assets (RWA) has graduated from PowerPoint presentations to balance sheets. Bernstein estimates that on-chain value locked in tokenized assets could more than double from approximately $37 billion in 2025 to around $80 billion in 2026. But the composition is changing even more dramatically than the totals suggest.

Equity tokenization—tokenized shares of stocks and ETFs—is projected to increase its share from just 2% to 16% of total value locked. That's an 8x expansion in a single year. Robinhood's recent launch of 200+ tokenized US stocks and ETFs for European customers on Arbitrum isn't just a product announcement; it's a preview of where capital markets are headed.

"Tokenization of assets is a freight train coming to markets," Robinhood CEO Vlad Tenev declared at a 2025 conference. "Cryptocurrency and traditional finance have been living in two separate worlds for a while, but they're going to fully merge."

The Depository Trust Company (DTC)—responsible for clearing and settlement across the securities industry—received SEC no-action relief in December 2025 to pilot tokenized services. The full launch is expected in the second half of 2026, potentially opening floodgates that have been building pressure for years.

Stablecoins: The $420 Billion Bridge to Mainstream Finance

If RWAs represent the destination, stablecoins are the rails. Bernstein forecasts stablecoin supply to grow 56% year-over-year to approximately $420 billion by late 2026, driven not by crypto speculation but by real-world utility: cross-border business payments, consumer remittances, stablecoin-based neobanks, and agentic payments.

The numbers already validate this thesis. Stablecoin transaction volume hit $46 trillion in 2025—more than 20x PayPal's volume and approaching 3x Visa's. When Circle, the issuer behind USDC, reports hundreds of millions in quarterly revenue simply from holding reserves in short-term Treasuries, it becomes clear that stablecoins have evolved from crypto trading tools into genuine financial infrastructure.

The fintech giants have taken notice:

• PayPal expanded PYUSD across Ethereum, Solana, and Stellar, introduced a 4% rewards rate, and enabled merchant acceptance for over 100 cryptocurrencies targeting 20 million merchants.
• Revolut has cumulatively sent over $10.5 billion in stablecoin payments as of December 2025. "2026 is going to be massive," said Leonid Bashlykov, Revolut's crypto head of product.
• Block (Cash App) processed roughly $283 billion in 2024 inflows across 57 million monthly users—and is accelerating crypto integration.

Standard Chartered CEO Bill Winters captured the zeitgeist at a late-2025 conference: "We'll eventually see the majority of transactions being settled on the blockchain."

The $44 Billion Prediction Market Revolution

Perhaps nothing illustrates the tokenization thesis better than prediction markets—a category that barely registered in mainstream finance two years ago but hit $44 billion in notional volume in 2025.

Kalshi reported $43.1 billion in 2025 volume—a staggering 2,100% increase from the prior year. Polymarket followed at $33.4 billion, despite operating primarily outside the US for most of that period. Together, Kalshi and Polymarket now command a combined valuation exceeding $20 billion, with Polymarket reportedly in talks for funding that could push its valuation to $15 billion following ICE's landmark $2 billion strategic investment.

Bernstein projects prediction market volumes to grow another 100% in 2026 to approximately $70 billion, creating a $1.4 billion annual revenue opportunity for market makers and exchanges. The new CFTC Chair's "Selig Initiative"—withdrawing proposals to ban event contracts—signals federal support for what the industry calls "information finance."

This isn't just about betting on elections. It's about price discovery for events that matter: economic indicators, policy outcomes, corporate decisions. When 30% of Polymarket's volume comes from AI agents, you're witnessing the birth of a new market primitive.

Bitcoin's Institutional Entrenchment: From Speculation to Treasury Asset

Corporate treasuries now hold over 1.075 million BTC—4.8% of circulating supply. In Q2 2025 alone, corporations acquired approximately 131,000 bitcoins, an 18% quarterly increase that outpaced ETF accumulation (111,000 BTC, 8% increase). Corporate appetite is accelerating faster than traditional investment vehicles.

MicroStrategy exemplifies this trend at scale, holding 687,410 BTC as of January 2026 at an average cost of $66,384 per coin. The company's "21/21 Plan"—raising $42 billion to acquire more Bitcoin—continues executing. As Bitcoin tested $91,000 in early January, MSTR shares surged double digits, demonstrating the amplified exposure investors seek.

Bitcoin ETFs entered 2026 with explosive momentum: $1.7 billion in inflows across the first three trading sessions, with the largest single-day inflow ($843.6 million) setting the pace for the year. Total cumulative ETF inflows have surpassed $58.1 billion, with assets reaching $128 billion—6.56% of Bitcoin's market cap. iShares Bitcoin Trust (IBIT) leads with $67.39 billion in AUM.

Bloomberg ETF analyst Eric Balchunas projects 2026 inflows could range from $20 billion to $70 billion depending on price action. At sustained rates, annualized inflows could approach $150 billion.

Bernstein's 2026 Price Targets and Investment Thesis

Bernstein maintained its $150,000 Bitcoin target for 2026 and $200,000 for the 2027 cycle peak, with a long-term 2033 forecast of approximately $1 million per BTC. But the more significant insight is structural: "The Bitcoin cycle has broken the four-year pattern and is now in an elongated bull cycle, with more sticky institutional buying offsetting any retail panic selling."

For equity exposure to the tokenization supercycle, Bernstein identified four primary proxies:

• Coinbase (COIN): The dominant US crypto exchange and infrastructure provider
• Robinhood (HOOD): Leading the tokenized equities charge with its Arbitrum-based L2
• Figure (FIGR): Specializing in blockchain-based lending and securities
• Circle (CRCL): The USDC issuer positioning for the stablecoin infrastructure buildout

The firm also highlighted IREN (formerly Iris Energy), which has pivoted from Bitcoin mining to AI infrastructure. Its $9.7 billion Microsoft deal and projected $3.4 billion in AI cloud ARR by end of 2026 demonstrate how crypto-native infrastructure companies are becoming critical nodes in the broader compute economy.

What the Supercycle Means for Builders

The tokenization supercycle isn't just an investment thesis—it's an infrastructure buildout that creates opportunities across the stack:

For RWA Protocols: The doubling of on-chain RWA value means demand for compliant tokenization platforms, oracle networks providing real-world data feeds, and interoperability solutions connecting tokenized assets across chains.

For Stablecoin Infrastructure: The path to $420 billion in stablecoins requires robust API infrastructure for payment integrations, compliance tooling for cross-border transactions, and high-availability node infrastructure for settlement guarantees.

For Prediction Markets: The growth to $70 billion in volume demands reliable blockchain infrastructure, real-time data feeds, and the computational capacity to support increasingly sophisticated market-making algorithms—including AI agents.

The Bottom Line

Bernstein's tokenization supercycle thesis rests on a fundamental observation: blockchain is transitioning from a speculative asset class to financial infrastructure. Stablecoins aren't just trading tools—they're payment rails. Tokenized securities aren't experiments—they're distribution upgrades for capital markets. Prediction markets aren't gambling—they're information discovery mechanisms.

When the Depository Trust Company launches tokenized equity settlement in late 2026, when stablecoin supply approaches half a trillion dollars, when prediction market volume matches traditional derivatives exchanges—these won't be crypto milestones. They'll be finance milestones.

The bottom, according to Bernstein, is behind us. The supercycle is just beginning.

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