In the first quarter of this year, the virtual asset market has been experiencing a "crypto winter" ..

Grayscale 26 Q1 Report Revealed
AI-related cash saved amid all sector declines
RWA and stablecoin markets Explosive development
Consideration is specializing in whether or not the ‘readability invoice’ will probably be handed by the finish of this 12 months

In the first quarter of this 12 months, the virtual asset market has been experiencing a “crypto winter” for six months on account of geopolitical dangers and macro issues.

On the twenty third (native time), Grayscale analyzed that the six main virtual asset sectors recorded unfavourable returns for 2 consecutive quarters, citing the deepening risk-averse sentiment and deleveraging throughout the market as the trigger of the weak virtual asset market.

Nonetheless, synthetic intelligence (AI)-related tokens and asset tokenization tasks confirmed a exceptional relative energy, sowing the seeds of the subsequent upward cycle.

◆ AI Coin’s ‘Operating Alone’ in Frozen Two Hearts

First Quarter Virtual Asset Sector Return Status All six major virtual asset sectors recorded negative returns in the first quarter of this year. However, the artificial intelligence (-14%) and finance (-15%) sectors were relatively good at defense. [Source = Grayscale] — First Quarter Virtual Asset Sector Return Standing All six main virtual asset sectors recorded unfavourable returns in the first quarter of this 12 months. Nonetheless, the synthetic intelligence (-14%) and finance (-15%) sectors have been comparatively good at protection. [Source = Grayscale]

In line with the Crypto Sector Index, collectively developed by Grayscale and FTSE and Russell, most sectors, together with consumption and tradition (-31%), utilities and companies (-24%), foreign money (-21%) and good contract platforms (-21%) suffered a main crash of greater than 20% in the first quarter of this 12 months. On the different hand, AI (-14%) and finance (-15%) sectors confirmed comparatively wonderful protection.

In explicit, the efficiency of particular person property was excellent. Taking a look at the prime 20 Q1 returns that adjusted for volatility, KITE, a customized Layer 1 blockchain for AI brokers, topped the record with an amazing 131.9% return.

Kite joined Google as an agent cost protocol accomplice, elevating expectations for the launch of Mainnet. In addition, Vitenser (TAO), a decentralized community for AI mannequin coaching, additionally ranked in the prime 20 with the largest-ever distributed Giant Language Mannequin (LLM) pre-training.

Grayscale analyzed the motive for the sturdy AI theme, saying, “Blockchain has a bonus as a cost rail for AI brokers in comparison with current finance.”

◆ Will RWA and DeFi be a black gap for institutional funds

The quantity of excellent agreements for conventional property similar to shares, gold, and crude oil of Hyperliquid, a conventional asset buying and selling trade that’s absorbed on-chain, is on the rise. [Source = Grayscale]

Basic indicators on-chain information help the structural development of the market. The general fee earnings for virtual property declined in the aftermath of the worth drop, however the adoption price of tokenized property and stablecoins exploded.

In the first quarter, the market capitalization of tokenized property surged by a whopping 245.1% year-on-year, exceeding $27.3 billion. The typical each day stablecoin quantity additionally rose 115.8% year-on-year to $50.2 billion, approaching an all-time excessive in mid-March.

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The boundaries between conventional and virtual property are additionally breaking down. Decentralized indefinite futures trade HyperLiquid has begun supporting the buying and selling of conventional property similar to shares, gold, silver and oil by means of the HIP-3 protocol, with excellent curiosity on the rise. This implies that along with common market hours, demand from buyers who need seamless buying and selling 24 hours and seven days is concentrated on-chain.

◆ The most important subject in the second half of the 12 months is the U.S. “Readability Invoice.”

In the first quarter of 2026, the prime 20 risk-adjusted price of return on virtual property was topped by the AI-themed blockchain “KITE,” adopted by JST and DEXE. Most of the prime ranks have been concentrated in the AI and monetary (RWA) sectors. [Source = Grayscale]

Specialists imagine that short-term uncertainty will proceed in the second quarter of 2026 on account of rate of interest revaluations and geopolitical crises. Nonetheless, the market’s largest concern from a long-term perspective is the route of adjustments in the U.S. regulatory setting.

In explicit, the business’s consideration is concentrated on the U.S. Readability Act. The invoice, which introduces a conventional financial-level framework for virtual asset capital markets, at the moment passes the Home of Representatives and is about to be reviewed by the Senate. In line with forecasting market platform Polymarket, the chance of the invoice being signed by the finish of this 12 months is round 60%, elevating expectations for passage.

“The passage of the Readability Invoice will probably be a important victory for the virtual asset business,” Grayscale stated. “Will probably be a large boon to the good contract sector, particularly supporting monetary platforms and tokenized property.”