Wall Street giant Goldman Sachs (GS) said improving regulation and the emergence of crypto use cases beyond trading support a constructive outlook for the sector, particularly for infrastructure companies that support the ecosystem without being as exposed to market cycles.
Regulatory uncertainty remains the main obstacle for institutions, and this context is changing rapidly, the bank said in a report published Monday.
“We view the improving regulatory environment as a key driver of continued institutional crypto adoption, particularly for buy-side and sell-side financial firms, as well as new crypto use cases expanding beyond trading,” wrote analysts led by James Yaro.
According to Yaro, upcoming US market structure legislation could be a key catalyst.
After President Donald Trump took office, a leadership overhaul at the Securities and Exchange Commission (SEC), which resulted in the confirmation of Paul Atkins as president, prompted the regulator to step down after years of aggressive enforcement from the crypto industry. The SEC has dropped almost all of its pending cases and has withdrawn from several active court battles.
Trump has made promoting the U.S. crypto industry a central policy goal, a position echoed by Atkins in making it a top priority at the SEC, an independent regulator traditionally insulated from direct control of the White House.
Bills currently circulating in Congress would clarify how tokenized assets and decentralized finance (DeFi) projects are regulated, and define the roles of the SEC and the Commodity Futures Trading Commission (CFTC), steps Goldman sees as essential to unlocking institutional capital.
Enacting the plan in the first half of 2026 would be particularly important, given the risk that U.S. midterm elections later in the year could delay progress, the report said.
The bank highlighted data from its own survey showing that 35% of institutions cite regulatory uncertainty as the main barrier to adoption, while 32% see regulatory clarity as the main enabler.
Despite growing interest, allocations remain modest: institutional asset managers have invested around 7% of their assets under management in crypto, although 71% say they plan to increase their exposure over the next 12 months, leaving substantial room for growth.
The bank said adoption has already accelerated through familiar vehicles such as exchange-traded funds (ETFs). Since their approval in 2024, bitcoin ETFs reached approximately $115 billion in assets by the end of 2025, while ether ETFs surpassed $20 billion. Hedge fund participation has also increased, with the majority now holding cryptocurrencies and planning further allocation increases.
Beyond trading, analysts have highlighted tokenization, DeFi and stablecoins as areas ripe for growth. Stablecoin legislation passed last year clarified oversight and reserve requirements, helping the market reach a capitalization of nearly $300 billion.
At the same time, changes in banking supervision, the abandonment of restrictive custody accounting rules, and the approval of new digital asset banking charters have collectively lowered the barriers preventing traditional financial institutions from engaging in crypto, the report adds.
U.S. market structure legislation is poised to become the dominant force for digital assets, crypto asset manager Grayscale said in a report last month. Analysts at the firm said they expected a bipartisan crypto market structure bill to become law in 2026, marking a significant milestone for the asset class.
Learn more: Grayscale sees regulation, not quantum fears, shaping crypto markets in 2026
