Charles Schwab’s 2026 Bitcoin Outlook: Navigating Macro Winds and Halving Headwinds

As the cryptocurrency market looks ahead to Bitcoin’s trajectory in 2026, Charles Schwab offers a nuanced perspective, anticipating a persistent tug-of-war between overarching macroeconomic trends and the inherent dynamics of the digital asset space. While improved liquidity conditions are poised to bolster risk assets, the lingering psychological impact of the “halving cycle” remains a significant factor, potentially tempering Bitcoin’s upward momentum throughout the year.

The Dual Forces Shaping Bitcoin’s Future

According to Jim Ferraioli, Director of Crypto Asset Research and Strategy at the Schwab Center for Financial Research, Bitcoin’s price performance in the coming year will be a complex interplay of “three major long-term forces” and “seven critical short-term factors.”

Long-Term Pillars of Support:

Ferraioli identifies the foundational elements sustaining Bitcoin’s value over the long haul:

• Global M2 Money Supply: The overall liquidity within the global financial system.
• Bitcoin’s Deflationary Supply Growth: The predictable, decreasing rate at which new Bitcoins enter circulation, contrasting with fiat currencies.
• Market Adoption Rate: The increasing integration and acceptance of Bitcoin across various sectors and user bases.

Short-Term Variables to Watch:

The immediate landscape, however, demands vigilance across a more intricate set of indicators:

• Market Risk Sentiment: The prevailing appetite for risk among investors.
• Interest Rate Trends: Global central bank policies and their impact on borrowing costs.
• U.S. Dollar Strength: The dollar’s performance relative to other major currencies.
• Seasonality: Historical price patterns linked to specific times of the year.
• Central Bank Liquidity: The extent of surplus liquidity injected by central banks.
• Whale Wallet Movements: Significant transactions by large holders, often signaling market shifts.
• Potential Financial Contagion Risks: Systemic risks that could spread across financial markets.

A Bullish Start to 2026, But Caution Prevails

The dawn of 2026 presents several short-term indicators leaning towards a bullish outlook. Ferraioli notes the sustained tightness in credit spreads and a “cleaner” market structure, with much of the unstable speculative derivative positions flushed out after the significant correction observed in late 2025.

“A sustained risk-on environment in equity markets should, theoretically, be a boon for cryptocurrencies, often considered the ‘ultimate risk asset’,” he elaborates.

Furthermore, monetary policy is anticipated to shift from a headwind to a tailwind. Ferraioli forecasts a continued softening of interest rates and the U.S. dollar throughout the year. “As quantitative tightening (QT) concludes and central bank balance sheets begin to expand once more, the resulting surge in liquidity is expected to provide substantial support for crypto asset prices,” he adds.

Navigating Significant Headwinds: Institutional Adoption and Halving Psychology

Despite these encouraging signs, investors are advised against premature celebration, as substantial headwinds persist. The market turbulence of late 2025 is expected to temper the pace of institutional adoption during the first half of the year, Ferraioli cautions. However, a breakthrough in regulatory clarity could swiftly reverse this trend. “Should the U.S. Congress successfully pass the Digital Asset Market Clarity Act, we could witness an accelerated entry of institutional investors into the market,” he suggests.

Another formidable variable is the enduring “halving cycle” narrative. Historically, the third year following a Bitcoin halving event has often demonstrated underperformance. Given the widespread belief in this cyclical pattern among a significant portion of investors, these psychological expectations alone could exert downward pressure, even in the presence of improving fundamentals.

While data since 2017 indicates an average annual Bitcoin gain of approximately 70% from its lowest point, Ferraioli projects that while Bitcoin will likely still deliver positive returns in 2026, these gains could fall significantly below its historical average.

Evolving Correlations: Bitcoin’s Shifting Relationships

Finally, Ferraioli highlights a noteworthy structural evolution: Bitcoin’s correlation with traditional assets is undergoing a significant re-evaluation.

He observes that Bitcoin continues to exhibit a strong correlation with large-cap AI technology stocks. However, its historical correlation with broader equity market indices has gradually diminished, signaling a potential decoupling in certain aspects of its market behavior.