[DigitalToday reporter Jinju Hong] Patrick Liu, institutional director at global cryptocurrency exchange Gemini, forecast 2026 as a structural turning point for the cryptocurrency market. He said conventional wisdom on bitcoin cycle theory, the regulatory environment and capital flows is breaking down, and there is a strong possibility that cryptocurrencies will be reshaped into assets centered on institutions and macroeconomics.

Liu stressed, through five industry outlooks released this week, that 2026 will be the year the way investors, policymakers and countries view bitcoin and cryptocurrency infrastructure fundamentally changes. Blockchain media outlet BeInCrypto reported the details on Jan. 7 local time.

Potential collapse of the bitcoin four-year cycle theory Liu pointed out that if bitcoin ends 2026 with a negative return, the long-accepted “four-year cycle theory” in the market could effectively collapse. In past cycles, steep drops of 75 to 90 percent repeated, but in the recent correction phase bitcoin has fallen about 30 percent from its peak, showing a more mature market structure, he explained.

He assessed that spot bitcoin ETF fund flows, the expansion of derivatives markets and advances in institutional custody solutions are absorbing supply shocks and easing extreme volatility. In the options market, implied volatility has fallen from around 80 percent in the past to 25 to 40 percent, signaling that bitcoin is gradually establishing itself as a macroeconomic asset.

2026 U.S. midterms, crypto emerging as a bipartisan issue Liu forecast there is a strong possibility that cryptocurrency will emerge as a bipartisan policy issue in the 2026 U.S. midterm elections. While Republicans have moved first to target pro-crypto voters, Democrats are also responding by pushing the market structure bill known as the CLARITY Act, he said.

He also said that in key battleground states such as Arizona, Georgia and Michigan, crypto policy could emerge as a core issue influencing voter sentiment.

Expansion of crypto-based prediction markets Liu forecast that crypto-based prediction markets will begin to grow in earnest in 2026. He assessed that these prediction markets can deliver results more efficiently than existing opinion polls or traditional forecasting models through real-time information aggregation and collective intelligence.

He explained that as Polymarket grows, regulated prediction platforms backed by exchange support are emerging, and Coinbase is also actively moving to expand prediction markets.

Digital asset treasury (DAT) corporate mergers accelerating The possibility was also raised that mergers among DAT companies could accelerate after a bear market. Liu pointed out that many DAT companies are trading at market capitalisations lower than the value of the cryptocurrencies they hold, and the limits of a simple holding strategy are becoming apparent. He cited Strategy as a representative example, noting the company recorded losses of about 60 percent in 2025, and forecast that restructuring and strategic realignment could begin in earnest in 2026.

Possibility of nation-level bitcoin adoption Finally, Liu predicted that 2026 could see a symbolic turning point in which at least one country sells gold and buys bitcoin. He added, “The United States is already using seized bitcoin as a strategic asset, and some countries such as Germany, Sweden and the Czech Republic are also considering bitcoin as a reserve asset,” and “Bitcoin’s mobility and transparent verifiability could be an attractive alternative for countries seeking to reduce dependence on the dollar.”