Gemini’s Director of Institutional, Patrick Liou, outlined five key predictions for the crypto market in 2026, following what he called a “historic” 2025 for digital assets.
His outlook highlights structural shifts in the market, increasing institutional adoption, and growing mainstream political acceptance, according to a note shared with Bitcoin Magazine.
Bitcoin breaks the four-year cycle narrative
Liou predicts that Bitcoin may end 2026 with a negative return, challenging the traditional four-year cycle that has historically guided investor expectations.
According to Liou, the market’s maturation — characterized by new participants, regulated investment vehicles, and deeper liquidity — has reduced volatility. He noted that recent pullbacks have been far smaller than in previous cycles, with Bitcoin down roughly 30% from its highs rather than the 75–90% declines seen historically.
Structural changes, including lower implied volatility in options markets, signal a broader investor base and a more durable bull case for the asset.
Political embrace of crypto for midterms
Liou expects both major U.S. political parties to increasingly court the crypto community in the lead-up to the 2026 midterms. While Republicans were the first to engage crypto voters in 2024, Democrats are anticipated to follow suit.
Liou highlighted the stalled Market Structure bill as a key legislative focus, predicting its passage in early 2026 with bipartisan support. Candidates in swing states such as Arizona, Nevada, Georgia, and Michigan are also expected to include crypto policy in their campaign agendas.
Crypto-backed prediction markets will gain traction
Prediction markets, which leverage crowd-sourced insights to forecast outcomes, are poised for growth, Liou said. Such platforms aim to reward informed forecasting while providing more accurate market intelligence.
Digital asset treasury companies will consolidate
After a wave of digital asset treasury (DAT) launches in 2025, Liou forecasts consolidation through mergers and acquisitions in 2026.
He noted that simply holding crypto will no longer suffice; DATs must demonstrate sophisticated financial management, including capital market engagement and balance sheet optimization, to maintain shareholder value.
Nation states may move gold into bitcoin reserves
Liou predicts that at least one nation will convert part of its gold reserves into Bitcoin next year. He cited Bitcoin’s advantages, such as instant transferability, on-chain verifiability, and fractionalization, as driving interest from sovereign investors.
The U.S., with its strategic digital asset framework, could be a candidate, while other countries seeking diversification from the dollar or high gold-to-GDP ratios may also explore the shift.
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