Gemini’s Patrick Liou Outlines Five Crypto Predictions That Could Define 2026

After a historic and structurally different 2025, the crypto market is entering a new phase—one shaped less by retail speculation and more by institutional capital, regulation, and geopolitical strategy.

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According to Patrick Liou, Director of Institutional at Gemini, many of the narratives that defined previous cycles are already breaking down. Looking ahead to 2026, Liou highlights five major predictions that signal how crypto’s role in global markets is evolving—from the end of the four-year cycle theory to sovereign Bitcoin adoption.

1. The Four-Year Cycle Theory Breaks Down

Bitcoin is on track to finish 2025 in negative territory, directly challenging the long-held four-year halving cycle narrative. In past cycles, downturns often meant 75–90% drawdowns. This time, Bitcoin has pulled back roughly 30% from its highs—an important distinction.

Liou points to a far more mature market structure. Institutional participation, regulated investment vehicles, and deeper liquidity have all contributed to reduced volatility. As crypto continues to establish itself as an institutional asset class, historical playbooks are becoming less reliable.

While 2025 has largely been a year of consolidation, the setup for 2026 appears constructive.
Monetary policy is trending toward easing, regulatory clarity is improving, and institutional adoption is shifting from experimentation to execution—particularly through ETF growth and expanded custody and trading infrastructure.
This evolution is already visible in derivatives markets. Bitcoin options implied volatility has largely stabilized in the 25–40% range, well below prior regimes where volatility regularly sat between 70–80%. The result is a broader investor base and a more durable, secular bull case than previous cycles.

2. Bipartisan Crypto Momentum Ahead of the 2026 Midterms

Crypto’s political relevance is no longer theoretical. In 2024, Republicans were the first to actively court crypto voters, recognizing the sector as a growing and durable voting bloc. Liou expects Democrats to follow suit in 2026, solidifying crypto as a mainstream political issue.

A key catalyst is the long-anticipated Market Structure bill. While stalled in the Senate, momentum continues to build on both sides of the aisle. Liou expects the bill to pass in the first quarter of 2026—first through the Senate, then the House, and ultimately to the President’s desk.

As a signal of bipartisan support, more than a dozen Democratic Senators are expected to vote in favor, bypassing the threat of a filibuster. Crypto policy is also likely to feature prominently in swing-state campaigns across Arizona, Nevada, Georgia, and Michigan, as candidates from both parties integrate digital asset policy into their legislative platforms.

3. Crypto-Native Prediction Markets Go Mainstream

Prediction markets are emerging as one of crypto’s most disruptive applications. By aggregating the wisdom of the crowd, these markets incentivize truthful insights and often outperform traditional forecasting tools.

Gemini’s launch of Gemini Predictions marks a major step in this direction. The product is the result of a multi-year regulatory journey that began with Gemini’s application for a Designated Contract Market (DCM) license in March 2020.

Liou sees prediction markets becoming increasingly popular as they move from niche tools to mainstream financial instruments—further positioning Gemini as a one-stop financial super app serving both retail and institutional users.

4. Digital Asset Treasuries Enter a Consolidation Phase

2025 saw a wave of new digital asset treasury (DAT) launches, but 2026 is likely to bring a shakeout. Many DATs are now trading at or below the value of the Bitcoin they hold, as investors no longer pay a premium for simple crypto exposure.

With spot Bitcoin ETFs and other regulated products widely available, owning Bitcoin through a public company is no longer enough to command higher valuations. This shift is setting the stage for consolidation across the sector, as weaker treasuries struggle to justify their market value.

To survive, leading DATs will need to do more than hold crypto on their balance sheets. They must demonstrate strong access to capital markets, active balance-sheet management, and the ability to deploy more sophisticated financial strategies. Those that succeed will emerge as category leaders, while others are likely to be acquired or fade out.

5. A Nation State Sells Gold to Buy Bitcoin

Perhaps the boldest prediction: in 2026, at least one nation state will announce plans to sell a portion of its gold reserves and reallocate into Bitcoin.
Bitcoin’s advantages—instant transferability, onchain verifiability, and fractionalization—make a compelling case for its role as “digital gold.” Liou sees sovereign adoption as the next phase of capital allocation, marking a shift from viewing Bitcoin as speculative to treating it as a reserve asset.
The United States is an obvious candidate, having already included digital assets within a broader strategic reserve framework. It’s conceivable that policymakers explore converting a portion of Fort Knox’s gold holdings into Bitcoin. Beyond the U.S., countries with high gold-to-GDP ratios or those seeking diversification away from the dollar are also well-positioned to make similar moves.

Bottom Line

Liou’s outlook for 2026 reflects a crypto market that is no longer defined by hype cycles, but by institutional structure, political relevance, and sovereign-level decision-making. If these predictions play out, 2026 could mark the year crypto fully crosses from alternative asset to embedded component of the global financial system.