Prominent cryptocurrency analysts are sounding alarms about a potential major market downturn in 2026, pointing to concerning macroeconomic signals from the Federal Reserve and historical patterns of financial stress. The warnings come alongside predictions that precious metals may continue to outperform cryptocurrencies through 2025, extending a trend that began in 2024.
Danny Crypton's analysis focuses on a "2026 Global Collapse" chart that identifies 2026 as a potential stress point following previous crises in 2008 and 2020. He argues that the Fed's recent balance sheet expansion—particularly its increased absorption of mortgage-backed securities over Treasuries—signals underlying funding stress rather than healthy liquidity support. "When the central bank starts absorbing more mortgage-backed securities than Treasuries, it tells you something about the quality of collateral coming into the system," the analysis states, suggesting this indicates pressure building beneath the surface.
The warning extends to structural debt issues, with interest costs becoming one of the fastest-growing parts of the U.S. budget. Combined with similar liquidity moves in China, this creates a potential global problem. For crypto markets, this environment is particularly dangerous: "When funding conditions tighten, markets don't fall apart all at once... crypto is usually where things unwind the fastest once the pressure finally spills over." The analysis emphasizes that in such conditions, "liquidity becomes picky, leverage disappears quickly, correlations jump, and assets that thrive on speculation and risk appetite suddenly start behaving like liabilities."
Simultaneously, Benjamin Cowen, founder of IntoTheCryptoverse, has issued a critical warning that precious metals appear positioned to outperform cryptocurrencies for the second consecutive year in 2025. His data-driven analysis points to gold achieving multiple record highs in 2024 with silver showing substantial gains, while major cryptocurrencies experienced increased volatility with mixed results.
Cowen's framework identifies several factors driving this divergence: central banks' accelerated gold accumulation, geopolitical tensions boosting safe-haven demand, interest rate environments affecting risk assets differently, and ongoing regulatory hurdles for blockchain innovation. He warns that precious metals might experience a significant correction later in 2025, potentially coinciding with or preceding an even sharper decline in cryptocurrency markets—a phenomenon he describes as "correlation convergence" that can erase diversification benefits.
The analyst advises traders to "operate based on the market that exists" rather than "the market you want," emphasizing discipline over prediction accuracy. His probabilistic approach suggests continued precious metals strength with potential late-year correction, while cryptocurrencies face possible underperformance with increased correlation risk to other markets.
