Is 2026 the year when cryptocurrencies fail?

There’s always been something rebellious about cryptocurrencies, thanks in large measure to their design and ethos.

Traditional fiat currencies are underwritten by a country’s government or state bank, with physical tokens such as coins and notes representing their value.

You can physically pick up currency, transfer it digitally and even exchange it for other fiat currencies at bureau de change, banks and Post Office branches – albeit with a processing fee.

Cryptocurrencies are very different.

They have no underwriting authority guaranteeing their value, and they’re not supported by any country or central bank.

They are stateless and borderless, holding the same value anywhere in the world.

You can’t go to an ATM and withdraw crypto, and exchanging it isn’t always easy, either.

However, you could create your own.

There’s no requirement to obtain a banking licence, make a guarantee to protect customer funds or even establish a registered trading address.

And after a few years when it seemed crypto founders could do no wrong, a highly eventful 2025 sowed seeds of doubt about whether these currencies have much of a future at all.

Rocket from the crypto

Although there are believed to be over 37 million unique cryptocurrencies in existence, nobody knows for sure because the lack of regulation means many are barely known about.

While new cryptocurrencies are being launched all the time, older ones are constantly falling into obsolescence and becoming worthless.

Indeed, any cryptocurrency is only worth what people are willing to pay for it.

A pound sterling is a recognised currency which will buy you a second-class stamp (with 13 pence change), roughly two and a half Freddos or one go on a modern arcade machine.

Although inflation naturally eats into currency’s value, the pound in your pocket will retain its value unless government-instigated devaluation takes place.

Cryptocurrency is very different, as even a cursory examination of the value held by industry darling Bitcoin over 2025 demonstrates.

As the original cryptocurrency, Bitcoin’s value has always oscillated wildly, but its 2025 performance was uniquely volatile.

It started the year trading at around £65,000, fell to £58,000 in April, soared up to £92,000 in October and then shed around 30 per cent of its value in the run up to Christmas.

This would be catastrophic if you were paid in Bitcoin in June and then tried to buy a car in November – though very few purchases can be made using Bitcoin or any cryptocurrency.

Despite its early champions pledging it would abolish fiat currencies, crypto is not used to buy and sell. Instead, it’s largely become a plaything for wealthy stock market investors.

Do you know anyone who earns cryptocurrency, or has ever bought something with it?

The Emperor’s new crypto

If the world woke up tomorrow and decided they’d had enough of cryptocurrencies, their value would fall to zero and every investment would be rendered worthless.

This fate has befallen most cryptocurrencies introduced since 2021, with 1.8 million failures recorded in the first three months of last year alone.

Cryptos fail due to various factors – a lack of interest, scams (which are very easy to execute in an unregulated and technical online environment), regulatory pressure and so on.

Then there’s security – or rather the lack of it.

Theft and loss is rampant throughout this sector. High-profile cases include the $200 billion FTX bankruptcy and the $450 billion Terra/Luna collapse.

Looking ahead, a Forbes report published in late December suggested the global crypto market could shed as much as 90 per cent of its value during 2026.

Between early October and mid-December alone, over $1.3 trillion was wiped off the total crypto market cap (measuring 18,224 currencies across almost 1,500 exchanges).

Even the ultimate crypto champion – US President Donald Trump – has seen his much-vaunted Trump coin shed almost 90 per cent of the value it held at its peak.

If you’ve already sunk hard-earned (fiat) currency into crypto, you may wish to follow the industry mantra and hold on for dear life.

Everyone else should approach any crypto investment, offer or payment with another mantra in mind – if you can’t afford to lose it, don’t risk it.