Something unusual happened across crypto markets in the first half of 2026: almost nothing escaped the selloff. According to a new report from Binance Research, the crypto market contraction in 2026 was not a reshuffling of capital from weaker sectors into stronger ones — it was a broad, simultaneous retreat across nearly every corner of the ecosystem.

Key takeaways

• DeFi total value locked fell by $43.4 billion, a 38% decline, in H1 2026.
• The combined market cap of six major Layer 1 blockchains dropped $246.5 billion, or 42%.
• Layer 2 user operations collapsed roughly 77% between January and June.
• Security incidents totaled 207 in H1, generating $972 million in losses.
• Prediction market trading volume surged 86% to $51.6 billion,…