Gemini prediction: Bitcoin’s return rate will be negative in 2026, sovereign countries may enter the market to buy Bitcoin

Gemini predicts that the Bitcoin market will become more mature in 2026, possibly breaking the traditional four-year cycle, with increased political participation, forecast market growth, the consolidation of digital asset custody companies, and at least one country converting part of its gold reserves into Bitcoin. This article originates from an article written by Micah Zimmerman, compiled, compiled and written by Foresight News.
(Preliminary summary: Asset review in 2025: Why will Bitcoin significantly underperform gold and US stocks? )
(Background supplement: VanEck: Bitcoin miners’ large-scale surrender means that the market is now at the bottom)

Contents of this article

Gemini predicts that the maturity of the Bitcoin market in 2026 may break its traditional four-year cycle. Political participation in the cryptocurrency space will rise, prediction markets will grow, digital asset custody companies will see consolidation, and at least one country may convert some of its gold reserves into Bitcoin.

Gemini Director of Institutional Business Patrick Liou has laid out five key predictions for the firm’s crypto markets in 2026, after calling 2025 a “historic” year for digital assets.

His outlook highlights structural shifts in the market, increased institutional adoption, and growing mainstream political acceptance, according to a note provided to Bitcoin Magazine.

Bitcoin breaks the four-year cycle narrative

Liou predicts that Bitcoin may end with negative returns in 2026, which would challenge the traditional four-year cycle that has historically guided investor expectations.

Liou believes that market maturity, characterized by the entry of new players, the emergence of regulated investment vehicles and deepening liquidity, has reduced volatility. He noted that the recent price correction has been far smaller than in previous cycles, with Bitcoin down about 30% from its highs, compared with historical declines of 75% to 90%.

Structural changes, including lower implied volatility in the options market, mean the investor base is broadening, providing a more sustainable reason to be bullish on the asset.

For the mid-term elections, political forces will embrace encryption

Liou predicts that on the eve of the 2026 mid-term elections, both major political parties in the United States will increase their efforts to win support from the cryptocurrency community. While Republicans are taking the lead in courting crypto voters in 2024, Democrats are expected to follow.

Liou emphasized that the currently stalled Market Structure Bill will be a legislative focus, predicting that the bill will gain bipartisan support and pass in early 2026. Candidates in key swing states such as Arizona, Nevada, Georgia and Michigan are also expected to include encryption policy on their campaign agendas.

Cryptocurrency-supported prediction markets will rise

Liou said that "prediction markets" that use crowd intelligence to predict results will usher in growth. Such platforms are designed to reward insightful predictive behavior while providing more accurate market intelligence.

Digital asset custody companies will see consolidation

Liou predicts that after a wave of digital asset custody companies emerge in 2025, the field will be consolidated through mergers and acquisitions in 2026.

He pointed out that it is no longer enough to simply hold cryptocurrencies; digital asset custody companies must demonstrate mature financial management capabilities, including participation in capital markets and optimizing balance sheets, in order to maintain shareholder value.

Countries may convert part of their gold reserves into Bitcoin

Liou predicts that at least one country will convert part of its gold reserves into Bitcoin next year. He pointed out that Bitcoin has the advantages of instant transfer, on-chain verifiability and divisibility, which are attracting the interest of sovereign investors.

The United States, with its strategic digital asset framework, may be one candidate, while other countries seeking to move away from U.S. dollar dependence or with higher gold-to-GDP ratios may also explore such a shift.