Barclays Signals a Down-Year for Crypto as Spot Trading Volumes Decline into 2026

Barclays has presented a cautious forecast for the cryptocurrency sector in 2026, anticipating a decline in trading activity and minimal incentives for growth, as outlined in their year-end research report.

Key Takeaways

Barclays predicts a challenging year ahead for cryptocurrency in 2026, with a decrease in retail spot trading and limited market drivers.
The bank emphasizes the decline in trading volumes, particularly affecting exchanges like Coinbase and Robinhood.
Regulatory changes in the U.S. may provide a long-term prospect for growth through clearer rules around digital assets.
Investors should consider that tokenization, while promising, is still in its infancy and may not significantly impact earnings in 2026.
The overall sentiment suggests that more favorable regulatory conditions are already reflected in current market prices.

Barclays sees weak crypto trading and limited 2026 catalysts

Cautious Outlook for Digital Asset Exchanges

Barclays has indicated that digital asset exchanges are encountering difficulties as retail engagement diminishes and spot trading volumes shrink. The bank classifies 2026 as a pivotal year for the industry, signifying a shift away from the intense boom-and-bust cycles characteristic of past years.

Platforms primarily focused on retail traders, such as Coinbase and Robinhood, are feeling the pressure from falling spot trading volumes, which are a vital income source for these exchanges. According to the report, “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,” highlighting the uncertainty in the market.

Historically, significant market movements have been spurred by major happenings like regulatory announcements and product launches. Barclays pointed to notable spikes in activity, such as the approval of spot Bitcoin exchange-traded funds in March 2024 and the rally following a favorable pro-crypto outcome in the U.S. presidential elections. However, the bank notes that there are currently few comparable events on the horizon until 2026.

Potential for Regulatory Progress

One possible silver lining identified in the report is the potential for regulatory advancements in the United States. Barclays highlighted the proposed CLARITY Act, which seeks to clarify whether digital assets should be treated as securities or commodities, helping to delineate oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The bank believes that clearer regulations could promote the launch of compliant products, especially in the sphere of tokenized assets, although they cautioned that any benefits from such policies would likely emerge over time rather than causing immediate market changes.

Focus on Long-Term Strategies

The report places significant emphasis on Coinbase, given its prominence as a U.S. crypto exchange. The company is branching out into derivatives trading, tokenized equities, and other ventures, accompanied by recent acquisitions for revenue diversification. Despite these strategic moves, Barclays lowered its price target for Coinbase shares, citing declining spot volumes and increasing operational expenses.

The concept of tokenization is gaining traction from both crypto-related firms and traditional financial institutions. Companies like BlackRock and Robinhood are launching pilot programs tied to tokenized assets. While Barclays recognizes the long-term potential of these initiatives, they believe the trend is still too early to have a significant impact on earnings in 2026.

Even with a more favorable political atmosphere towards digital assets following the recent U.S. elections, Barclays remarked that a lot of this optimism seems to be reflected in current market valuations. Any legislative progress, including the CLARITY Act, would necessitate Senate approval and may encounter legal hurdles before it can have a real-world influence.

Conclusion

Barclays summarizes 2026 as a transitional year for the cryptocurrency industry, with companies concentrating on long-term investments in compliance, infrastructure, and tokenized finance as retail activity wanes, and immediate growth opportunities remain scarce.