Barclays has issued a cautious outlook for the crypto sector, warning that 2026 could mark a period of weaker trading activity and fewer market-moving catalysts. In its latest year-end research, the bank suggests the industry may be transitioning away from the boom–bust retail trading cycles that fueled earlier rallies, toward a slower and more structurally focused phase of growth.
The bank notes that spot crypto trading volumes are already trending toward a down year in fiscal 2026. Lower volatility and reduced speculative demand are expected to limit price action, making it harder to attract new retail participants. With fewer active traders, overall liquidity and engagement across the market could decline further, reinforcing the slowdown.
This shift poses particular challenges for exchanges that depend heavily on retail spot trading. Platforms such as Coinbase and Robinhood derive a significant portion of their revenue from spot volumes, and Barclays believes these businesses may come under pressure as trading activity softens. As a result, the bank trimmed its price target for Coinbase, citing shrinking spot volumes and rising operating costs. While Coinbase continues to invest in diversification—through derivatives, tokenized equities, and recent acquisitions—Barclays views these efforts as unlikely to fully offset near-term revenue headwinds.
Fewer Catalysts Expected to Drive the Next Cycle
Barclays also points to a lack of clear catalysts that could reignite strong market momentum through 2026. In previous cycles, major events such as regulatory breakthroughs, new product launches, or political developments sparked renewed enthusiasm. The bank highlights examples like the approval of spot Bitcoin ETFs in March 2024 and the post-election rally later that year. Looking ahead, Barclays sees no comparable triggers on the horizon that could generate a similar surge in trading activity.
Regulatory developments are viewed as a long-term positive but not an immediate solution. The proposed CLARITY Act, which aims to define whether digital assets fall under securities or commodities law and clarify the roles of the SEC and CFTC, could provide much-needed regulatory certainty. However, Barclays cautions that Senate approval, potential legal challenges, and the gradual nature of implementation mean any tangible benefits would likely emerge slowly rather than delivering a near-term boost to the market.
Tokenization and Regulation Seen as Long-Term Opportunities
Tokenization remains one of the most promising strategic themes in crypto, according to Barclays, but its financial impact is expected to be limited in 2026. Major players such as BlackRock and Robinhood are already experimenting with tokenized assets through pilot programs and early-stage initiatives. While the long-term potential is significant, Barclays believes these projects are still too nascent to materially lift earnings in the near future.
Overall, Barclays frames 2026 as a year of transition for the crypto industry. With retail momentum fading, firms are likely to focus more on compliance, infrastructure development, and expanding new product lines. Clearer U.S. regulation and tokenization are positioned as important long-term growth drivers, but the bank expects their contributions to be gradual, signaling a slower and more measured phase for the crypto market rather than an immediate resurgence.
