Patrick Liou, institutional leader at Gemini, says 2026 will mark a structural break for crypto markets. He forecasts that long-standing narratives around Bitcoin cycles, regulation, and capital flows will give way to a more institutional and macro-driven regime.
In a set of five industry forecasts released this week, Liou explained why 2026 could change how investors, decision-makers, and even national governments approach Bitcoin and crypto infrastructure.
Bitcoin's 4-year cycle is dead
Liou believes that if Bitcoin ends 2026 in negative territory, it will invalidate the traditional four-year cycle model.
Instead of declines of 75–90% seen in previous cycles, Bitcoin is approximately 30% below its peak, reflecting a more mature market structure.
This view is consistent with recent market developments. ETF inflows, deeper derivatives markets, and institutional custody have absorbed supply shocks that previously triggered extreme boom/bust cycles.
Options markets also reflect this shift, with implied volatility ranging between 25–40%, significantly lower than historical peaks near 80%.
As a result, Bitcoin is now traded more as a macro asset. BTC is now linked to liquidity and positioning, rather than a calendar-driven halving trade.
Bipartisan crypto support expected at the 2026 US midterms
The leader at Gemini expects crypto to emerge as a cross-party political focus ahead of the 2026 US midterms.
Although Republicans were early to win crypto voters, Democrats are increasingly engaging as legislation on market structure gains momentum.
This outlook aligns with recent developments. The long-discussed market structure bill, or CLARITY Act, remains in place but is progressing through cross-party negotiations.
More analysts expect a breakthrough in the Senate early in 2026, with enough bipartisan support to avoid a filibuster.
Additionally, crypto policy has become an issue in swing states like Arizona, Georgia, and Michigan. Candidates from both parties are beginning to address regulation, innovation, and investment protection.
More crypto-driven prediction markets
Liou sees crypto-driven prediction markets as a major disruptor in 2026, driven by their ability to aggregate real-time information more effectively than opinion polls or forecasts.
This trend is already visible. Polymarkets' growth over the past year has attracted new participants, including exchange-backed and regulated platforms.
More crypto companies, such as Coinbase, have aggressively entered prediction markets. This expansion reflects growing demand for market-based analysis tied to politics, macro events, and economic outcomes.
Digital asset treasuries will merge to survive
Liou forecasts consolidation among digital asset treasuries (DATs) after a challenging market cycle. Following a wave of DAT launches, many companies are now trading below the value of their underlying crypto holdings, pressuring NAV multiples.
The past months have already shown stress among publicly traded crypto treasury vehicles, with weak stock returns, withdrawal risks, and balance sheet pressure.
MicroStrategy, the largest Bitcoin treasury company, experienced significant losses in Q4 2025. MSTR stock ended 2025 with a surprising 60% decline.
In 2026, simple buy-and-hold strategies may become less viable. This will pressure weaker players toward mergers or liquidation.
National state sells gold reserves to buy Bitcoin
Finally, the Gemini leader predicts that at least one national state will sell part of its gold reserves to buy Bitcoin. This would formalize BTC as 'Digital Gold'.
The idea is no longer marginal. The US has already implemented a strategic framework for digital assets through seized Bitcoin.
Meanwhile, countries such as Germany, Sweden, and the Czech Republic have openly discussed Bitcoin as a reserve asset.
For nations seeking diversification or reduced dependence on the dollar, Bitcoin's portability and verifiability present a compelling alternative.
Overall, Liou's forecasts suggest that 2026 will be a year in which crypto's next phase is shaped less by hype cycles and more by institutions, politics, and state capital.