Wall Street giant Goldman Sachs (GS) said improved regulation and the emergence of crypto use cases beyond trading support a constructive outlook for the industry, especially for infrastructure companies that support the ecosystem without being so exposed to market cycles.
Regulatory uncertainty remains the biggest barrier for institutions, and that backdrop is changing rapidly, the bank said in a report on Monday.
“We see the improved regulatory backdrop as a key driver for continued institutional crypto adoption, particularly for buyside and sellside financial firms, as well as new use cases for crypto evolving beyond trading,” wrote analysts led by James Yaro.
According to Yaro, upcoming US market structure legislation could be a crucial catalyst.
After President Donald Trump took office, a management review at the Securities and Exchange Commission (SEC), culminating in the confirmation of Paul Atkins as chairman, led the regulator to retreat from years of aggressive enforcement of the crypto industry. The SEC dropped nearly all of its pending cases and withdrew from several active legal battles.
Trump made promoting the US crypto industry a central policy goal, a stance Atkins echoed by making it a top priority at the SEC, an independent regulator traditionally insulated from direct White House control.
Draft bills now 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 says are critical to unlocking institutional capital.
Passage in the first half of 2026 would be particularly significant given the risk that US midterm elections later that year could delay progress, the report said.
The bank pointed to its own survey data showing that 35% of institutions cite regulatory uncertainty as the biggest barrier to adoption, while 32% see regulatory clarity as the top catalyst.
Despite growing interest, allocations remain modest: Institutional asset managers have invested around 7% of assets under management in crypto, although 71% say they plan to increase exposure over the next 12 months, leaving significant 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 have grown to about $115 billion in assets by the end of 2025, while ether ETFs have surpassed $20 billion. Hedge fund participation has also increased, with a majority now holding crypto and planning further allocation increases.
In addition to trading, the analysts highlighted tokenization, DeFi and stablecoins as areas poised for expansion. Stablecoin legislation passed last year clarified oversight and reserve requirements, helping the market grow to nearly $300 billion in capitalization.
Meanwhile, changes in banking supervision, the withdrawal of restrictive custody rules and the approval of new bank charters for digital assets have collectively lowered the barriers for traditional financial institutions to engage with crypto, the report added.
US market structure legislation is poised to become the dominant force for digital assets, crypto asset manager Grayscale said in a report last month. The firm’s analysts said they expect a two-tier crypto market structure bill to become law in 2026, marking a milestone for the asset class.
Read more: Grayscale sees regulation, not quant fears, shaping crypto markets in 2026
