Patrick Liou, Gemini’s Director of Institutional, shared his insights on five significant predictions for the crypto market in 2026, following what he described as a “historic” 2025 for digital assets.
His perspective emphasizes structural changes in the market, the rise of institutional adoption, and an increasing acceptance in mainstream politics, as detailed in a note sent to Bitcoin Magazine.
Bitcoin challenges the four-year cycle narrative
Liou anticipates that Bitcoin may conclude 2026 with a negative return, contradicting the conventional four-year cycle historically shaping investor expectations.
He believes that the market’s maturation—marked by new players, regulated investment avenues, and improved liquidity—has diminished volatility. Recent pullbacks, he noted, have been significantly smaller than those in past cycles, with Bitcoin experiencing a decline of about 30% from its peak, unlike the historic 75–90% drops.
Structural advancements, such as reduced implied volatility in options markets, indicate a more extensive investor base and a more resilient case for the asset’s future.
Political support for crypto leading up to midterms
Liou foresees that both major U.S. political parties will increasingly seek the support of the crypto community ahead of the 2026 midterm elections. While Republicans initiated engagement with crypto voters in 2024, it is expected that Democrats will soon follow.
He pointed to the stalled Market Structure bill as a focal point, predicting its passage with bipartisan support in early 2026. Candidates from swing states such as Arizona, Nevada, Georgia, and Michigan are likely to incorporate crypto policy into their campaign platforms.
Growth of crypto-backed prediction markets
Liou stated that prediction markets, which leverage crowd-sourced insights to forecast outcomes, are set for expansion. These platforms seek to reward informed predictions while delivering enhanced market intelligence.
Consolidation of digital asset treasury companies
Following a surge in digital asset treasury (DAT) launches in 2025, Liou anticipates a wave of mergers and acquisitions in 2026.
He emphasized that merely holding crypto will no longer be sufficient; DATs will need to showcase advanced financial management, including engagement in capital markets and optimizing balance sheets, to uphold shareholder value.
Possibility of nations converting gold reserves to Bitcoin
Liou predicts that at least one nation will begin converting a portion of its gold reserves into Bitcoin next year. He pointed to Bitcoin’s benefits, such as instant transferability, on-chain verifiability, and fractionalization, as key factors attracting sovereign investors.
The United States, given its strategic digital asset framework, could be a contender, while other countries aiming to diversify away from the dollar or with high gold-to-GDP ratios may also consider this transition.
