Investor enthusiasm for crypto is cooling, and spot trading volumes are trending lower, according to a new year-end report from Barclays.

The bank expects a subdued 2026 for digital assets, citing weak structural growth drivers and muted activity across exchanges like Coinbase (COIN) and Robinhood (HOOD). Retail-focused platforms, which thrived during past bull runs, now face a calmer environment as trading volumes—key revenue drivers—remain soft.

“Spot crypto trading volumes […] appear to be trending towards a down-year in FY26, and it is not clear to us what might reverse this trend,” Barclays analysts wrote.

Historically, crypto markets have surged around major events, such as product launches, policy announcements, or political developments—like the March 2024 spot bitcoin ETF inflows or the pro-crypto U.S. presidential win in November 2024. In the absence of similar catalysts, Barclays sees little near-term structural growth.

One potential market driver is regulation. The pending CLARITY Act, which aims to clarify the boundary between digital commodities and securities and assign regulatory oversight between the SEC and CFTC, could reduce operational uncertainty and pave the way for new product launches, particularly in tokenized assets.

Coinbase remains a focal point for Barclays. While the company is expanding into derivatives and tokenized equity trading, headwinds from shrinking spot volumes and rising costs weigh on its outlook. Analysts revised COIN’s price target down to $291, noting a conservative earnings forecast despite growth initiatives and acquisitions that could become more impactful over time.

Tokenization continues to attract interest from crypto-native and traditional finance firms, including BlackRock (BLK) and Robinhood. However, Barclays cautions that the trend remains early-stage and is unlikely to significantly impact earnings in 2026.

Although U.S. political developments have turned slightly more favorable for crypto, Barclays believes much of this optimism is already priced in. Legislative initiatives like the CLARITY Act would still need to navigate the Senate and potential legal hurdles before influencing markets.

In short, 2026 could be a transitional year for crypto. With retail activity declining and no immediate catalysts, companies are focusing on long-term investments in tokenized finance and compliance—but whether these efforts pay off next year remains uncertain.