Fidelity’s latest quarterly crypto livestream framed the second quarter of 2026 as a transition period for crypto assets, with the company’s speakers pointing to a mix of macro, regulatory and on-chain developments that could shape the next phase of the market. The discussion focused on Bitcoin’s current consolidation, the growing role of stablecoins, and whether smart contract platforms could find new momentum through tokenization and AI-driven developer productivity.
Crypto Outlook for Q2 2026
Fidelity Global Macro Director Jurrien Timmer described the recent sell-off as a “mild winter” and not the kind of deep crypto sellout seen in previous cycles. Bitcoin, which he said peaked around $126,000 before falling to roughly $60,000, has already suffered a decline of more than 50%, but he argued that such declines should become less severe as the asset ages.
“I’m not looking for an 80% loss because that would be a pretty harsh winter,” Timmer said. “I think a 50% to 60% pullback, which we’ve had, is probably the maximum that’s needed. Again, it’s not market timing here, but I think we’re in the zone. So yeah, a mild winter, but maybe spring is just around the corner.”
This view ties into a broader Fidelity debate about whether bitcoin’s four-year cycle is still intact. Max Wadington of Fidelity Digital Assets said the first quarter likely confirmed the timing component of the cycle, as the previous record high in November 2021 closely aligned with the market peak in late 2025. But both speakers argued that the mechanism behind the cycle is changing as halvings matter less and demand-side factors take on greater importance.
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For Timmer, the immediate setup is not so much about a new breakout, but rather a base-building phase. He said bitcoin appears to be testing a range of around $60,000 to $70,000 as the market looks for a new narrative after both hard money and speculative trades lost momentum.
“We did the hard money story. Gold is in charge now. We had the speculative story,” Timmer said. “And so I think this is where it’s waiting for a new storyline, if you will. It’ll still be connected to those two. But something has to be done.”
A possible catalyst is macro policy. Timmer said he is keeping a close eye on future leadership changes at the Federal Reserve, arguing that closer coordination between the Fed and the Treasury Department in managing debt loads could ultimately revive the hard money case for bitcoin if markets begin to question the central bank’s independence. According to him, gold has already responded to that theme, while bitcoin lagged behind.
However, the macro image is not one-dimensional. Timmer said bitcoin is currently caught between two identities: an “aspirational store of value” associated with monetary reduction and a speculative asset often traded in accordance with technical risk.
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He pointed to a discrepancy between the rising global money supply, which he estimated at around $120 trillion and up about 12% year-on-year, and Bitcoin’s weaker recent performance. At the same time, he noted that software stocks are under pressure, and that bitcoin has moved more in that direction than alongside hard money assets.
Wadington’s second-quarter focus is further down the pile. He highlighted tokenization, DeFi and stablecoins as key themes that are already gaining popularity, especially after Fidelity Digital Assets launched its own dollar-backed stablecoin, FIDD. He emphasized that stablecoins should not be viewed so much as long-term investments, but rather as on-chain cash instruments designed for 24-hour, low-cost global transfers.
More interestingly, he said the next step for Ethereum and Solana could come not just from AI agents executing on-chain transactions, but from AI that will make crypto developers more productive in the short term.
“What I’m looking for are signs or signals that the thousands of crypto developers are becoming marginally or incrementally more productive,” Wadington said. “And I think this will have a direct impact on the underlying value of these assets. Personally, I don’t think this is something that has been talked about much and that we might see in the metrics here soon.”
At the time of writing, the total crypto market capitalization was $2.41 trillion.
Featured image created with DALL.E, chart from TradingView.com