Goldman Sachs (GS), a leading firm on Wall Street, indicated that enhanced regulation and the rise of crypto applications beyond mere trading are fostering a positive outlook for the industry, particularly for infrastructure firms that bolster the ecosystem while being less susceptible to market fluctuations.
According to the bank’s report released on Monday, regulatory ambiguity continues to be the primary hurdle for institutions, but this environment is rapidly evolving.
“The improvement in the regulatory landscape is a significant factor in the ongoing adoption of crypto by institutional players, particularly for buy-side and sell-side financial organizations, along with the emergence of new crypto use cases beyond trading,” analysts led by James Yaro stated.
Yaro also noted that upcoming U.S. market structure legislation could serve as a crucial catalyst.
Following the inauguration of President Donald Trump, a shift in leadership at the Securities and Exchange Commission (SEC), culminating in Paul Atkins’ confirmation as chair, led the regulatory body to retract from years of stringent enforcement against the crypto sector. The SEC has dismissed almost all pending litigations and withdrawn from multiple active legal battles.
Trump identified the enhancement of the U.S. crypto landscape as a core policy objective, a narrative that Atkins supported by prioritizing it at the SEC—an independent body usually shielded from direct control by the White House.
Proposed legislation currently under consideration in Congress would clarify the regulation of tokenized assets and decentralized finance (DeFi) projects, and specify the responsibilities of the SEC and Commodity Futures Trading Commission (CFTC). Goldman views these actions as vital for facilitating institutional investment.
The approval of such legislation within the first half of 2026 would be particularly crucial, given the potential for U.S. midterm elections later that year to stall advancements, according to the report.
The bank referred to its survey data, revealing that 35% of institutions identify regulatory ambiguity as their foremost obstacle to adoption, while 32% perceive regulatory clarity as the key catalyst.
Despite a rising interest, allocations remain limited: Institutional asset managers have invested roughly 7% of their assets under management into crypto, although 71% expressed intentions to increase their exposure within the next year, indicating significant growth potential.
Adoption has already ramped up through established vehicles such as exchange-traded funds (ETFs). Since their introduction in 2024, bitcoin ETFs have amassed approximately $115 billion in assets by the conclusion of 2025, with ether ETFs exceeding $20 billion. Participation from hedge funds has also surged, with a majority now including crypto in their portfolios and planning further increases.
The analysts underscored areas poised for growth beyond trading, including tokenization, DeFi, and stablecoins. Legislation on stablecoins passed last year has clarified regulatory oversight and reserve requirements, aiding market growth to nearly $300 billion in capitalization.
Simultaneously, modifications in banking supervision, the easing of restrictive custody accounting norms, and the approval of innovative digital-asset bank charters have collectively reduced barriers for traditional financial institutions to engage with crypto, the report noted.
U.S. market structure legislation is set to become a paramount influence for digital assets, according to a report from crypto asset manager Grayscale last month. Their analysts forecast that a bipartisan crypto market structure bill will be enacted in 2026, marking a significant milestone for the asset class.
Read more: Grayscale sees regulation, not quantum fears, shaping crypto markets in 2026
