Goldman Sachs sees regulatory clarity and new crypto use cases as key drivers for broader institutional adoption.

In a report released Monday, the bank said improving regulation and the growth of infrastructure-focused projects are creating a more constructive outlook for the industry, particularly for firms that support crypto without heavy exposure to market cycles.

“Regulatory progress is a central factor in ongoing institutional crypto adoption, especially for buy-side and sell-side financial firms, alongside emerging use cases beyond trading,” analysts led by James Yaro wrote. Forthcoming U.S. market structure legislation could serve as a pivotal catalyst, the report said.

Goldman highlighted the SEC’s leadership shift under President Donald Trump, culminating in Paul Atkins’ confirmation as chair, which prompted the regulator to scale back enforcement and drop pending cases. Draft bills circulating in Congress aim to clarify how tokenized assets and DeFi projects are regulated and define the roles of the SEC and CFTC. Passage in the first half of 2026 would be especially important ahead of midterm elections.

Survey data cited by Goldman shows 35% of institutions see regulatory uncertainty as the main adoption barrier, while 32% view clarity as the top catalyst. Institutional allocations remain modest, with asset managers investing about 7% of AUM in crypto, though 71% plan to increase exposure over the next year.

ETF adoption has accelerated, with bitcoin ETFs reaching $115 billion and ether ETFs surpassing $20 billion by year-end 2025. Hedge fund participation has grown, and emerging areas such as tokenization, DeFi, and stablecoins — supported by recent legislation — are poised for expansion. Changes in bank supervision and the approval of new digital-asset charters have further lowered barriers for institutional engagement.

Grayscale echoed Goldman’s view, projecting that bipartisan crypto market structure legislation in 2026 could mark a milestone for the industry.