3 Crypto Sectors That Could Outperform a Falling Crypto Market in 2026

Crypto sectors don’t all move together. That’s the part most retail investors miss when Bitcoin starts bleeding.

Bitcoin dropped hard in early 2026. Panic spread fast. But Jeff Dorman, Chief Investment Officer at Arca, had a different read on the situation. In a Milk Road Show interview, he said the crash wasn’t a crypto problem. Wall Street funds pulled money across all asset classes. Crypto just got caught in the crossfire. Interestingly, Coinbase data showed regular holders were actually buying during the dip, not selling.

So if Bitcoin’s moves are increasingly tied to macro conditions and institutional flows, where should investors actually look right now?

Dorman pointed to three crypto sectors showing genuine, measurable traction.

The 3 Crypto Sectors Worth Watching Right Now

1. DeFi: Real Revenue, Real Growth

DeFi is one of the crypto sectors that has quietly put up strong numbers in 2026. Total value locked is rising. Trading volume is shifting from centralised exchanges to on-chain protocols. And some projects are now generating actual revenue.

Hyperliquid, for example, has become one of the top decentralized perpetual platforms globally. Pump.Fun is another case worth studying. It sits at roughly a $2 billion valuation and pulls in approximately $500 million in daily revenue. It routes 99% of that revenue into token buybacks. At that pace, the entire circulating supply gets bought back in under 3.5 years. That’s not speculation. That’s a business model with teeth.

Buybacks matter because they’re one of the few ways protocol success actually flows back to token holders. Without that mechanism, token holders are just along for the ride.

2. Stablecoins: The Quiet Giant

Stablecoins crossed $10 trillion in transaction volume in January 2026 alone, according to data cited by Dorman. That number is hard to ignore.

What makes this one of the more credible crypto sectors heading into the rest of the year is institutional participation. JP Morgan, Citi, and PayPal have all launched their own stablecoin products. That’s not fringe adoption. These are legacy financial institutions betting real resources on stablecoin infrastructure.

The GENIUS Act in the US is also pushing regulatory clarity for stablecoins forward. Clearer rules tend to attract more institutional capital, which tends to lift the whole sector.

3. Real-World Asset Tokenization: The Long Game

Of the three crypto sectors Dorman flagged, RWA tokenization carries arguably the biggest upside over time. The logic is straightforward. Somewhere around $600 trillion in real-world assets, think stocks, bonds, real estate, and private equity, sit off-chain today. Only about $1 trillion has moved on-chain so far.

BlackRock, Goldman Sachs, and Apollo are already building here. BlackRock’s BUIDL fund crossed $500 million in assets under management within weeks of launching in 2024. The infrastructure is being laid right now.

Why the Four-Year Cycle Argument Is Getting Tired

Dorman also pushed back on something a lot of crypto Twitter still treats as scripture. The four-year Bitcoin halving cycle theory. He pointed out it’s built on just two data points from 2018 and 2022, and both crashes were driven by the Fed hiking interest rates aggressively, not by anything native to crypto markets.

Now that Bitcoin is woven into ETFs and institutional portfolios, these older patterns apply even less than before. Investors who are watching only Bitcoin’s price in 2026 may be looking in the wrong place entirely.

Which crypto sectors are growing in 2026? 

DeFi, stablecoins, and real-world asset tokenization are the three crypto sectors showing measurable growth independent of Bitcoin’s price action.

Why do token buybacks matter? 

Buybacks return protocol revenue directly to token holders by reducing the circulating supply. Projects like Pump.Fun uses this to create tangible value.

Is the four-year Bitcoin cycle still relevant? 

Less so. With institutional money and ETFs now driving Bitcoin’s price, macro conditions play a bigger role than the halving cycle alone.

Should investors ignore Bitcoin completely? 

Not at all. But focusing only on BTC means missing the crypto sectors that are quietly building real fundamentals.

Get the news in a Jist. Follow Cryptojist on X and Telegram for real-time updates!

Disclaimer:

Look, we’re just journalists reporting the news here, not your financial advisors. Everything you read above is for information purposes only. Crypto is wild, unpredictable, and can absolutely wreck your savings if you’re not careful. Never invest money you can’t afford to lose. Seriously, we mean it. Do your own research, talk to actual licensed financial professionals, and remember that past performance means absolutely nothing when it comes to future results. The crypto market can turn on a dime, and what’s hot today might be toast tomorrow. We’re not responsible for your investment decisions, good or bad. Trade smart, stay safe, and don’t bet the farm on anything you read on the internet, including this article.