Zach Pandl: Bitcoin projected to hit $126,000 by mid-2026, Ethereum to outperform due to regulatory clarity, and the rise of stablecoins in corporate finance

Key Takeaways

• Bitcoin is projected to reach a new all-time high by the first half of 2026.
• Ethereum is expected to continue outperforming Bitcoin due to its market dynamics.
• The US crypto industry is moving towards greater regulatory clarity.
• The Genius Act has significantly influenced the regulatory approach to crypto.
• Positive trends are observed in ETF product launches within the crypto space.
• Stablecoins are predicted to become more integrated into corporate finance.
• Banks are proactively engaging with crypto to remain competitive.
• Large companies may begin issuing blockchain-based tokens as part of their capital structure.
• DeFi is poised to compete with traditional finance in cross-border payments and lending.
• Demand for alternative stores of value is driving capital into crypto.
• Less than half a percent of US advised wealth is currently allocated to crypto.
• Bitcoin’s price may face pressure from profit-taking by long-term holders.
• Ethereum benefits more from regulatory clarity compared to Bitcoin.
• Solana is expected to lead in areas requiring high transaction turnover.
• Clear regulatory infrastructure reduces downside risk for crypto investors.

Guest intro

Zach Pandl is Head of Research at Grayscale Investments. Prior to joining Grayscale, he worked as a macroeconomist and markets strategist at Wall Street firms including Goldman Sachs, Nomura Securities, and Lehman Brothers.

Bitcoin’s future trajectory

• Bitcoin is expected to reach a new all-time high in the first half of 2026. “We think Bitcoin reaches a new all-time high in the first half of twenty twenty-six” – Zach Pandl.
• A specific price prediction for Bitcoin is set at $126,000 by June 30, 2026. “We hit a 126,000…” – Zach Pandl.
• Bitcoin’s price may face pressure from profit-taking by long-term holders, but this trend is likely nearing its end. “I think we are mostly through that…” – Zach Pandl.
• The current bull market for Bitcoin is driven by macro demand for alternative stores of value and regulatory clarity. “We think the fundamental pillars driving the bull market very much in place…” – Zach Pandl.
• The demand for Bitcoin is supported by macroeconomic imbalances and the search for alternative stores of value. “The number one driver of capital flowing into crypto is demand for alternative stores of value…” – Zach Pandl.
• Wealth will be a steady source of demand for capital inflow into crypto ETFs, creating a persistent bid for Bitcoin. “I think that this will be a very steady source of demand for capital inflow into the ETFs…” – Zach Pandl.
• The total inflows into crypto, including treasury companies, could reach around $150 billion. “I think JPMorgan came out with a report saying that there was about a $150,000,000,000 in of inflows last year into crypto.” – Zach Pandl.
• Bitcoin’s price dynamics are influenced by macroeconomic factors and ETF flows. “I’d say maybe if I had to put a kind of rough number on it I’d say it’s sort of seventy thirty…” – Zach Pandl.

Ethereum’s market position

• Ethereum is likely to continue outperforming Bitcoin. “My view would be Ethereum continues to outperform” – Zach Pandl.
• Ethereum benefits more from regulatory clarity compared to Bitcoin, which is still developing its layer two solutions. “Ethereum smart contract platform in some ways it benefits more from regulatory clarity than Bitcoin.” – Zach Pandl.
• If regulatory clarity improves, Ethereum is likely to continue outperforming Bitcoin. “If we get regulatory clarity… my view would be Ethereum continues to outperform.” – Zach Pandl.
• Ethereum is well-positioned due to its perceived scarcity and macroeconomic demand. “I do think it is considered by many investors as a scarce commodity…” – Zach Pandl.
• Ethereum has more at stake than other smart contract platforms regarding the success of the market structure bill. “Ethereum has more at stake than some of the other players…” – Zach Pandl.
• Ethereum ETFs and other smart contract tokens will become more accessible to mainstream investors this year. “I think investors can expect more of the smart contract tokens to be available to mainstream investors through ETF structure this year.” – Zach Pandl.
• Ethereum focuses on high-quality block space and decentralization rather than competing on fees and speed. “Ethereum… is going for high quality block space more decentralization more resilience…” – Zach Pandl.

Regulatory landscape and its impact

• The crypto industry is moving towards greater regulatory clarity in the United States. “We see a very encouraging trend on regulatory clarity for the crypto industry here in the United States” – Zach Pandl.
• The Genius Act has led to significant changes in the regulatory approach to crypto. “The Genius Act that you mentioned all the changes from the SEC and other” – Zach Pandl.
• Title one of the legislation, which clarifies the commodity and security status of tokens, is the most important for investment businesses like Grayscale. “What that means is really the section one title one of this piece is the most important for Grayscale…” – Zach Pandl.
• Clear regulatory infrastructure reduces downside risk for crypto investors. “Once you provide a clear regulated infrastructure around crypto it means that investors have protection…” – Zach Pandl.
• The potential for bipartisan legislation in crypto is promising despite current challenges. “That’s amazing for the crypto industry that we have a chance of real bipartisan legislation in a very polarized time.” – Zach Pandl.
• Regulatory clarity is expected to allow large companies to issue blockchain-based tokens as part of their capital structure. “Regulatory clarity is gonna allow that to continue.” – Zach Pandl.
• Regulatory developments are crucial for the future performance of Ethereum and other smart contract platforms. “Regulatory clarity… my view would be Ethereum continues to outperform.” – Zach Pandl.

Stablecoins and corporate finance

• Stablecoins are expected to become more integrated into corporate finance and banking operations. “Stablecoins on corporate balance sheets in their official SEC filings…” – Zach Pandl.
• Banks are proactively engaging with crypto to stay competitive, regardless of pending legislation. “Everybody is building and nobody is going to wait until President Trump’s signature hits the legislation…” – Zach Pandl.
• The use of stablecoins in regions like Venezuela may increase due to geopolitical changes. “Tether and stable coin use is very active in that economy…” – Zach Pandl.
• Stablecoins are predicted to play a significant role in cross-border payments and collateralized lending. “Decentralized finance excels at a couple specific things today and these are things like cross border payments…” – Zach Pandl.
• The integration of stablecoins into corporate finance is seen as a visible trend among Wall Street banks. “These are gonna be some of the big visible things that you see Wall Street banks doing.” – Zach Pandl.
• The demand for stablecoins is driven by macroeconomic imbalances and the search for alternative stores of value. “The number one driver of capital flowing into crypto is demand for alternative stores of value…” – Zach Pandl.
• The role of stablecoins in the economy is expected to grow as they become more integrated into traditional financial systems. “Stablecoins on corporate balance sheets in their official SEC filings…” – Zach Pandl.

DeFi’s competitive edge

• DeFi will compete with traditional finance in areas like cross-border payments and collateralized lending. “Decentralized finance excels at a couple specific things today and these are things like cross border payments…” – Zach Pandl.
• Real-time visibility and auditability in DeFi are crucial for decision-making and legal compliance. “The real-time visibility they get allows their clients to make really fast decisions…” – Zach Pandl.
• The primary driver of capital flowing into DeFi is the demand for alternative stores of value due to macroeconomic imbalances. “The number one driver of capital flowing into crypto is demand for alternative stores of value…” – Zach Pandl.
• DeFi projects face operational and regulatory challenges, emphasizing the need for transparency. “This auditability… is actually a legal requirement in many places.” – Zach Pandl.
• The competitive edge of DeFi lies in its ability to offer services like cross-border payments and trading of crypto-native assets. “Decentralized finance excels at a couple specific things today…” – Zach Pandl.
• DeFi is seen as a potential threat to traditional financial institutions due to its competitive capabilities. “Decentralized finance excels at a couple specific things today…” – Zach Pandl.
• The demand for DeFi services is driven by macroeconomic factors and the search for alternative financial solutions. “The number one driver of capital flowing into crypto is demand for alternative stores of value…” – Zach Pandl.

Macroeconomic influences on crypto

• The primary driver of capital flowing into crypto is the demand for alternative stores of value due to macroeconomic imbalances. “The number one driver of capital flowing into crypto is demand for alternative stores of value…” – Zach Pandl.
• The current market dynamics are primarily driven by macroeconomic factors and ETF flows. “I’d say maybe if I had to put a kind of rough number on it I’d say it’s sort of seventy thirty…” – Zach Pandl.
• The recent price increase in crypto is largely due to the resurgence of ETF investments. “I think it’s driven by both the macro story a demand for alternatives stores of value…” – Zach Pandl.
• The underlying debt problem is the root of all our issues, leading to higher inflation and a weaker dollar. “The underlying debt problem is the root of all of our issues…” – Zach Pandl.
• We will see persistent demand for alternative stores of value due to higher inflation and dollar debasement. “What it means for me is higher inflation over time a weaker dollar…” – Zach Pandl.
• Geopolitical events can significantly impact US macro markets and the demand for US Treasury bonds. “When I see these events like Venezuela, you know what does it mean from the standpoint of the dollar…” – Zach Pandl.
• There are potential tail risks associated with geopolitical events that could lead to higher deficits and increased bond issuance. “There are tail risks in both of those directions…” – Zach Pandl.

Smart contract platforms’ strategies

• Smart contract platforms are essential to the crypto asset class and require differentiated strategies to succeed. “Our view is that you have to have a differentiated strategy…” – Zach Pandl.
• Only a handful of smart contract platforms will dominate the market and capture significant fees over time. “Our view would be half a dozen or so smart contract platforms…” – Zach Pandl.
• Ethereum focuses on high-quality block space and decentralization rather than competing on fees and speed. “Ethereum… is going for high quality block space more decentralization…” – Zach Pandl.
• Solana is expected to continue leading in areas requiring high transaction turnover, such as tokenized equity trading. “I think it will continue to be a leader in the space…” – Zach Pandl.
• Ethereum has more at stake than other smart contract platforms regarding the success of the market structure bill. “Ethereum has more at stake than some of the other players…” – Zach Pandl.
• The competitive landscape among smart contract platforms requires unique strategies for success. “Our view is that you have to have a differentiated strategy…” – Zach Pandl.
• The consolidation trend in the smart contract space suggests that not all projects will succeed long-term. “Our view would be half a dozen or so smart contract platforms…” – Zach Pandl.

Federal Reserve and inflation dynamics

• Federal Reserve independence is crucial to avoid higher average inflation rates. “What we mean by central bank independence in a substantive way is independence from the nation’s debt problem…” – Zach Pandl.
• Monetary policy dependence on fiscal situations and election cycles can lead to higher inflation. “If the Fed becomes dependent on those things… it will lead to a higher average inflation rate over time.” – Zach Pandl.
• The underlying debt problem is the root of all our issues, leading to higher inflation and a weaker dollar. “The underlying debt problem is the root of all of our issues…” – Zach Pandl.
• We will see persistent demand for alternative stores of value due to higher inflation and dollar debasement. “What it means for me is higher inflation over time a weaker dollar…” – Zach Pandl.
• The relationship between central bank policies, national debt, and inflation rates is crucial for economic stability. “What we mean by central bank independence in a substantive way is independence from the nation’s debt problem…” – Zach Pandl.
• The risks associated with intertwining monetary policy with political and fiscal pressures are significant. “If the Fed becomes dependent on those things… it will lead to a higher average inflation rate over time.” – Zach Pandl.
• Understanding the economic factors influencing inflation and the demand for alternative assets is vital for investors. “The underlying debt problem is the root of all of our issues…” – Zach Pandl.