Barclays anticipates 2026 to be a slow, transitional year for the cryptocurrency market, as retail spot trading diminishes, Coinbase’s projections are downgraded, and the focus on tokenization and U.S. regulatory frameworks remains a long-term goal.
Summary
- Barclays warns that diminishing retail engagement and declining spot trading volumes may lead to a challenging year for crypto exchanges and trading platforms in 2026.
- The bank has adjusted its target for Coinbase downwards as spot trading contracts and costs rise, despite the exchange’s push into derivatives and tokenized equities for diversification.
- Barclays emphasizes long-term tailwinds from tokenization and U.S. legislative reforms such as the CLARITY Act, although it cautions that improvements in regulation and earnings will be slow.
Barclays has delivered a cautious perspective on the cryptocurrency landscape for 2026, predicting a downturn in trading activity and limited growth catalysts, as indicated in its year-end research report.
Barclays shifts towards acceptance of digital asset exchanges
The financial institution observed that digital asset exchanges are facing obstacles as retail activity declines and spot trading volumes fall. Barclays describes 2026 as a transitional phase for the industry, signifying a shift away from the typical boom-and-bust cycles experienced by crypto markets in the past.
Retail-focused platforms such as Coinbase and Robinhood are under pressure from decreasing spot trading volumes, which are essential for generating revenue for these exchanges, according to the report. “Spot crypto trading volumes seem to be on track for a downturn in FY26, and it remains unclear what might change this trajectory,” the analysts remarked.
The bank pointed out that earlier bull markets were driven by heightened volatility and speculative interest, which prompted a rise in retail trading. This dynamic has significantly weakened, resulting in fewer active traders in spot markets and less price movement to attract newcomers, according to the analysis.
Historically, cryptocurrency markets have reacted to major events such as regulatory announcements, product launches, and political shifts. Barclays referenced previous activity surges, including the approval of spot Bitcoin exchange-traded funds in March 2024 and the subsequent rally following a favorable pro-crypto result in the U.S. presidential election later that year. However, the bank noted that few similar catalysts are on the horizon through 2026.
The report identified potential regulatory advancements in the United States as a possible positive development. Barclays spotlighted the proposed CLARITY Act, legislation intended to clarify whether digital assets are classified as securities or commodities and to delineate oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The bank indicated that clearer regulatory guidelines could promote compliant product launches, especially in the realm of tokenized assets, but warned that any positive effects would likely be gradual and not prompt immediate market activity.
Coinbase received particular attention in the Barclays report due to its status as a leading U.S. crypto exchange. The company is broadening its scope to include derivatives trading, tokenized equities, and other ventures, alongside recent acquisitions for revenue diversification. Barclays lowered its price target for Coinbase shares in light of declining spot volumes and increasing operating expenses, despite ongoing strategic investments.
Tokenization continues to garner interest from both crypto-focused firms and traditional financial entities. Companies such as BlackRock and Robinhood have initiated pilot programs and preliminary offerings associated with tokenized assets, as noted by the bank. While Barclays recognized the strategic importance of these initiatives, it characterized the trend as still nascent and unlikely to significantly impact earnings in 2026, viewing tokenization as a long-term growth opportunity.
Despite a more supportive political climate for digital assets post-recent U.S. elections, Barclays remarked that much of the resulting optimism appears factored into current market prices. Legislative measures like the CLARITY Act would necessitate Senate approval and may encounter legal hurdles before having a tangible impact, according to the report.
The bank views 2026 as a transitional year for the cryptocurrency sector, with companies concentrating on long-term investments in compliance, infrastructure, and tokenized finance amidst diminishing retail activity and a scarcity of immediate growth drivers.
