Why The Real Bull Rally Could Be Hiding In 2026 Rather Than 2025

If you’ve been feeling bearish about this year’s crypto market, here’s a thought: maybe the bull run didn’t fizzle—it just got postponed.

Crypto analyst Lark Davis recently laid out a compelling case that 2026 might be when things finally shift into high gear. The reasoning? Bull markets don’t typically ignite during periods of hype and optimism. They actually tend to spark when sentiment hits rock bottom—when investors are exhausted, skeptical, and ready to throw in the towel. Sound familiar? That pretty much describes the vibe throughout 2025.

The Economy’s Weak Foundation In 2025

So what’s been holding things back? Manufacturing tells the story. Despite accounting for 10%-11% of U.S. GDP and employing around 13 million people, the sector has been in a tailspin. The ISM manufacturing PMI dropped to 48.2 in November—marking nine straight months of contraction. That’s not a wobble; that’s a trend.

New orders cratered to the mid-47 range, payroll hiring nearly stalled at 44, and roughly two-thirds of manufacturers were just trying to manage headcount rather than expand. The broader picture: even with AI excitement lighting up headlines, much of the real economy was essentially in neutral throughout 2025.

Where The Catalyst Could Come From

Fast-forward to 2026, and the landscape shifts dramatically. The AI infrastructure boom isn’t theoretical anymore—it’s becoming the backbone of capital expenditure.

U.S. data center spending hit over $400 billion in 2025. Projections suggest it reaches approximately $600 billion in 2026 and surpasses $700 billion by 2027. This isn’t just software spending either; it’s bricks-and-mortar infrastructure—massive server deployments, cutting-edge chips, upgraded power grids, and substantial construction projects. Globally, the buildout is even more ambitious: analysts anticipate 2,000+ new data centers by 2030, with infrastructure investment approaching $7 trillion over five years.

Monetary Tailwinds + Earnings Growth = Structural Strength

Adding fuel to the fire: the Federal Reserve is wrapping up quantitative tightening and is projected to return roughly $40 billion monthly to balance sheet expansion. Easier monetary conditions combined with forecasted 14% S&P 500 earnings growth in 2026 creates a fundamentally different macro environment than what we’re navigating now.

The convergence of these factors—recovering manufacturing, renewed liquidity, and robust corporate earnings—could set the stage for the kind of sustained rally that everyone hoped would happen this year. Whether that dynamic plays out across broader markets or amplifies the bull run potential in crypto remains to be seen, but the structural setup for 2026 is materially stronger than what 2025 handed us.