Barclays Sees a Catalyst Drought for Crypto Markets in 2026

Barclays is forecasting a more challenging year ahead for the cryptocurrency sector, warning that trading activity is losing steam and investor enthusiasm is fading. 

In a year-end research report published Friday, the bank said 2026 is shaping up to be a down year for digital asset exchanges as retail participation cools and clear catalysts for renewed growth remain elusive.

The outlook marks a shift from the boom-and-bust cycles that defined crypto markets in recent years, with Barclays arguing that the industry is entering a more subdued and transitional phase.

Spot Trading Volumes Continue to Cool

According to Barclays, retail-focused platforms such as Coinbase and Robinhood are facing mounting pressure as spot trading volumes trend lower. These volumes are a critical revenue driver for exchanges, and their decline poses a direct challenge to earnings growth.

“Spot crypto trading volumes […] appear to be trending towards a down-year in FY26, and it is not clear to us what might reverse this trend,” the analysts wrote.

During previous bull cycles, heightened volatility and speculative demand helped drive surges in retail trading. 

Barclays said that dynamic has weakened significantly, with fewer traders actively participating in spot markets and less price action to attract new entrants.

Lack of Clear Market Catalysts

Crypto markets have historically been driven by major inflection points, including regulatory announcements, product launches and political developments. 

Barclays pointed to past bursts of activity, such as the approval of spot Bitcoin exchange-traded funds in March 2024 and the rally that followed a pro-crypto outcome in the U.S. presidential election later that year.

Those events created short-term spikes in volumes and sentiment, but Barclays sees little on the immediate horizon with similar impact. In the absence of headline-driven momentum, the bank believes structural growth in trading activity will remain limited through 2026.

Regulatory Clarity Could Help, but Slowly

One potential positive highlighted in the report is regulatory progress in the United States. Barclays pointed to the proposed CLARITY Act, which aims to define whether digital assets fall under securities or commodities law and clarify oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

While not a guaranteed market mover, the legislation could reduce long-standing regulatory uncertainty for crypto firms. Barclays said clearer rules may encourage more compliant product launches, particularly in tokenized assets, but cautioned that any benefits would likely materialize gradually rather than trigger an immediate surge in activity.

Coinbase Remains Central to the Outlook

Coinbase featured prominently in Barclays’ analysis, reflecting its position as a bellwether for the U.S. crypto exchange sector. The company is expanding into derivatives trading, tokenized equities and other growth initiatives, alongside recent acquisitions aimed at diversifying revenue.

However, Barclays said those efforts face near-term headwinds from shrinking spot volumes and rising operating costs. As a result, the bank revised its price target for Coinbase shares down to $291, citing a more conservative earnings outlook despite longer-term strategic investments.

Coinbase share price (Source: Google Finance)

Tokenization Gains Attention but Lacks Near-Term Impact

Tokenization continues to draw interest from both crypto-native companies and traditional financial institutions. 

Firms such as BlackRock and Robinhood have launched pilot programs and early-stage offerings tied to tokenized assets, signaling confidence in blockchain-based financial infrastructure.

Barclays acknowledged the strategic importance of the initiatives but said the trend remains too early-stage to materially affect earnings in 2026. 

The bank described tokenization as a long-term growth opportunity rather than a meaningful near-term revenue driver.

A Transitional Year for the Crypto Industry

Despite a more favorable political tone toward digital assets following recent U.S. elections, Barclays believes much of that optimism is already priced into markets. 

Any legislative progress, including the CLARITY Act, would still need to pass the Senate and withstand potential legal challenges before having a practical impact.

Overall, Barclays characterized 2026 as a transitional year for crypto. 

With declining retail activity and limited immediate tailwinds, companies are increasingly focused on long-term investments in compliance, infrastructure and tokenized finance. 

Whether those bets deliver tangible results next year or further down the road remains uncertain.