With its new 21Shares mid-year report, the Zurich-based crypto ETP provider takes stock of ten of its own annual forecasts at the halfway mark. Despite a price decline of roughly 50 percent from the all-time high, the company rates the Bitcoin cycle as intact.
21Shares ranks among the largest providers of crypto ETPs worldwide, meaning exchange-traded products that offer regulated exposure to digital assets. Founded in 2018, the company is based in Zurich and operates as a subsidiary of US broker FalconX. Published under the title "State of Crypto", the report appears twice a year and ranks as an industry reference. In it, the provider measures ten of its own annual forecasts against current on-chain and market data. The seventeenth edition appeared on 24 June 2026 as a mid-year review for the current year. At the time of the analysis, Bitcoin traded at around 60,000 USD. That was about 32 percent below the start of the year. Previously, the all-time high in October 2025 had stood at 126,000 USD. Ether fared comparatively worse, trading at roughly 1,580 USD, 47 percent below the start of the year.
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Bitcoin cycle holds above investors' cost basis
The report's central finding concerns the depth of the ongoing correction. The correction closely follows historical post-halving rhythms. At roughly 50 percent, the decline from the peak is indeed significant. However, it remains well short of the 80 to 90 percent seen in the bear markets of 2018 and 2022. The company attributes this milder development to increased institutional participation. A growing share of holdings sits in ETF custody, and as a result panic selling did not materialize.
This pattern shows up in the ETF holdings. US spot Bitcoin ETFs recorded net outflows of around 3 billion USD since the start of the year. Nevertheless, the products still hold 1.25 million BTC, within 8 percent of their all-time high. The underlying coins therefore remain largely in the market, while the movements play out in the price. Newer products likewise attracted capital. The Hyperliquid spot ETF recorded more than 150 million USD in net inflows in its first month after launch.
"While total global crypto ETP AUM stands at 140 billion USD, 15 percent below the start of the year and driven by price declines, the underlying BTC holdings amount to 1.25 million coins. Investors are holding through the volatility or quietly building strategic positions." - Adrian Fritz, Chief Investment Strategist, 21Shares
On-chain signals likewise support this reading. The aggregate cost basis of investors stands at 54,000 USD. Bitcoin has not yet fallen below this level during the downturn. Above it, the provider marks a gamma flip level of 68,000 to 70,000 USD. Below this threshold, hedging activity by market makers amplifies negative price moves. The SOPR ratio additionally fell to around 0.7 recently, which identifies short-term holders as the main source of selling pressure. For year-end, 21Shares now projects a Bitcoin price of 100,000 USD. That marks a reduction from its original forecast of a new all-time high. The conclusion on the cycle nevertheless remains confident: it is evolving, but not broken.
Prediction markets grow ten times faster than expected
Prediction markets let users stake capital on the outcome of real-world events, from elections to sports results. These bets are bundled into tradable prices. In this segment, the mid-year review came out most clearly in favor of the forecast. By the end of May 2026, trading volume totaled 57.5 billion USD. That equals ten times the same period a year earlier. As a result, the market reached 57.5 percent of the original annual target of 100 billion USD after just five months. Moreover, this volume already exceeds the total volume of individual segments at established exchanges.
Given this momentum, 21Shares raises its year-end target to 200 billion USD. For the second half of the year, the company additionally points to two major events as catalysts. These include the ongoing FIFA World Cup and the US midterm elections in November 2026. The report regards both as further drivers of betting interest.
DeFi security losses slow TVL growth
The DeFi sector, meaning decentralized finance applications without intermediaries, developed considerably worse than expected. Such protocols handle lending, trading and yield products through smart contracts. The capital locked in these protocols, measured as Total Value Locked, currently stands at around 140 billion USD. December's forecast, however, had projected 300 billion USD. The provider attributes this gap not primarily to weak price performance, but to a structural security problem.
Security losses have so far totaled more than 840 million USD in 2026, spread across more than 50 exploits. Consequently, the current year ranks among the worst ever for DeFi security according to 21Shares. The exploit of the KelpDAO platform triggered capital withdrawals in the billions. It shows how individual incidents can set off chain reactions. For institutional adoption, this loss of trust weighs heavily, because security guarantees form a basic precondition for regulated capital inflows.
Stablecoins mark a new all-time high
Stablecoins, by contrast, paint a picture that runs counter to the price chart. Their total supply reached an all-time high of around 314 billion USD. In the bear markets of 2018 and 2022, it had previously shrunk by more than 30 percent. 21Shares reads this as the strongest single signal of structural adoption. The provider attributes the growth to regulatory clarity. The drivers are the GENIUS Act in the US and the MiCA regulation in the EU. Furthermore, the company projects a supply of 400 to 600 billion USD by year-end.
The tokenization of real-world assets follows a similarly structural path, though with a clear separation of two categories. Public blockchains hold more than 31 billion USD in tokenized assets. Of this, 15 billion USD is in US Treasury bonds. At the same time, permissioned networks such as Canton add around 350 billion USD. Furthermore, the US securities depository DTCC plans to begin integrating tokenized treasuries from July 2026. However, the provider no longer considers the original annual target of 500 billion USD on public chains achievable.
The company finally sees itself confirmed in the consolidation of Layer-2 networks. Base, Arbitrum and Optimism now jointly account for 83 percent of total L2 DeFi TVL. Back in February 2026, Ethereum co-founder Vitalik Buterin had stated that the rollup-centric roadmap no longer made sense. The December forecast had anticipated that most insufficiently differentiated L2s would fail. It therefore counts as fulfilled.
