Wall Street heavyweight Goldman Sachs (NYSE: GS) says easing regulation and broader crypto use cases are improving the industry’s outlook, especially for infrastructure firms with less exposure to price swings.
In a report released Monday, the bank said regulatory clarity now stands as the biggest factor shaping institutional adoption.
Analysts argued that the regulatory environment is shifting quickly after years of uncertainty that kept large investors on the sidelines. Goldman’s team, led by James Yaro, said clearer rules could encourage banks, asset managers, and brokers to expand crypto activity.
Additionally, the analysts said new applications beyond trading are making the sector easier for institutions to justify.
According to the report, U.S. market structure legislation could become a turning point for digital assets. Such legislation would define how tokenized assets and decentralized finance projects fall under existing financial laws. After President Donald Trump returned to office, regulators changed direction on crypto enforcement. The Securities and Exchange Commission replaced its leadership and confirmed Paul Atkins as chair.
Subsequently, the SEC stepped back from many lawsuits filed against crypto firms in prior years. The agency dropped most pending cases and exited several ongoing court battles. Trump made domestic crypto development a policy priority, and Atkins echoed that stance at the SEC.
However, the regulator remains formally independent.
Draft bills now circulating in Congress aim to divide oversight between the SEC and the Commodity Futures Trading Commission. Goldman said that clarity around agency roles remains essential for unlocking larger pools of capital. The report said passage in the first half of 2026 would carry added importance. Meanwhile, U.S. midterm elections later that year could stall legislative momentum if delays occur.
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Bitcoin ETFs held $115b in assets by end of 2025
Goldman cited its own survey data to show why timing matters. About 35 per cent of institutions named regulatory uncertainty as their main obstacle to crypto adoption. Conversely, 32 per cent said regulatory clarity would act as the strongest catalyst. That gap suggests policy changes could quickly influence investment behavior.
Despite rising interest, institutional exposure remains relatively small. Asset managers have allocated roughly seven per cent of assets under management to crypto, the bank said. However, 71 per cent of surveyed institutions plan to increase exposure within the next year.
That intention leaves significant room for growth if conditions continue improving. Goldman said adoption has already accelerated through familiar investment products. Since approval in 2024, bitcoin exchange-traded funds have expanded rapidly.
By the end of 2025, bitcoin ETFs held about USD$115 billion in assets, the report said. Additionally, ether ETFs surpassed USD$20 billion over the same period. Hedge funds have also increased participation in digital assets. Most now hold some crypto exposure and expect to raise allocations further.
Beyond trading, the bank pointed to several emerging areas. Tokenization, decentralized finance, and stablecoins could see faster institutional involvement.
Stablecoin legislation passed last year clarified reserve and oversight requirements. Consequently, the stablecoin market has grown to nearly USD$300 billion in capitalization. Goldman said changes in bank supervision have also reduced barriers. In addition, regulators rolled back restrictive custody accounting rules affecting digital assets.
The approval of new digital-asset bank charters has further eased entry for traditional firms. Those changes allow banks to offer custody and related services more confidently. Meanwhile, crypto asset manager Grayscale said U.S. market structure legislation will dominate the sector’s outlook. The firm recently said it expects a bipartisan bill to pass in 2026.
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