Goldman Sachs Predicts Regulatory Reform Will Drive Institutional Crypto Adoption in 2026

TLDR

• Goldman Sachs identifies regulatory reform as the biggest catalyst for institutional crypto adoption in 2026
• The bank upgraded Coinbase to Buy with a $303 price target, citing shift from cyclical to structural growth
• Bitcoin ETFs reached $115 billion in assets by end of 2025, while ether ETFs surpassed $20 billion
• Strategy increased bitcoin holdings to 673,783 coins but reported $17.44 billion unrealized loss in Q4
• Bank of America now allows advisers to recommend spot bitcoin ETFs as 1% to 4% portfolio allocation

Goldman Sachs released a sector outlook predicting regulatory clarity will fuel the next wave of institutional crypto adoption. The bank adopted a “selectively constructive” stance on digital assets for 2026.

The investment firm identified regulatory uncertainty as the main barrier preventing wider institutional participation. According to Goldman’s survey data, 35% of institutions cite regulatory concerns as their biggest hurdle to adoption. Another 32% view regulatory clarity as the top catalyst for entry.

The regulatory landscape is shifting rapidly following political changes in Washington. After President Donald Trump took office, the Securities and Exchange Commission underwent a leadership overhaul. Paul Atkins was confirmed as SEC chair and made crypto promotion a top priority.

The SEC dropped nearly all pending cases against crypto companies. The regulator also withdrew from several active court fights. This marks a reversal from years of aggressive enforcement actions.

Draft legislation circulating in Congress aims to clarify how tokenized assets and decentralized finance projects are regulated. The bills would define the roles of the SEC and Commodity Futures Trading Commission. Goldman views passage of this legislation in the first half of 2026 as essential.

The bank upgraded Coinbase to a Buy rating with a $303 price target. Analysts see the company shifting from cyclical to structural growth. Subscription and services revenue from custody and stablecoins now account for a larger portion of Coinbase’s business.

Institutional Investment Vehicles Gain Traction

Exchange-traded funds have become a major vehicle for institutional adoption. Bitcoin ETFs grew to roughly $115 billion in assets by the end of 2025. Ether ETFs surpassed $20 billion during the same period.

Hedge fund participation has increased as well. A majority of hedge funds now hold crypto positions. Most plan to increase their allocations further in 2026.

Despite growing interest, current allocations remain modest. Institutional asset managers have invested about 7% of assets under management in crypto. However, 71% say they plan to increase exposure over the next 12 months.

Goldman forecasts 10% year-over-year revenue growth for the brokers and crypto sector. The firm predicts hybrid models combining traditional finance and digital assets will outperform pure-play niche companies.

Bank of America is integrating digital assets into its wealth business. The bank now allows advisers to recommend spot bitcoin ETFs to suitable clients. The recommended allocation ranges from 1% to 4% of portfolios.

Bank of America’s chief investment office approved four liquid funds for coverage. These include products from BlackRock, Fidelity, and Bitwise. BlackRock’s IBIT fund recorded $287.4 million in net inflows on Friday, its largest single-day total in nearly three months.

Stablecoin legislation passed last year clarified oversight and reserve requirements. The stablecoin market grew to nearly $300 billion in capitalization. Changes in bank supervision and the rollback of restrictive custody accounting rules have lowered barriers for traditional financial institutions.

Strategy, the world’s largest public holder of bitcoin, increased its stockpile to 673,783 coins. The company added 1,287 bitcoin for approximately $116 million. Strategy also boosted cash reserves to $2.25 billion through common stock sales to fund dividends.

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