Written by: Rita

Crypto trading fell 30% in July and another 21% in August, continuing a decline for 10 consecutive months, exceeding the median duration of previous five cycles. However, Goldman Sachs, in a report on American brokerage and cryptocurrency industry released on August 24, maintained a "cautiously optimistic" stance for the second half of the year, stating that if the crypto market warms up, it will provide additional upward options.

The logic of traditional brokers is a seasonal rebound in September, the story of predicting the market is based on a structural growth of 1160% over two years, and the highlights of crypto are the possibility of a reversal after the down cycle approaches historical limits. Goldman Sachs believes that the current valuation of the entire sector is only at 30% of the historical percentile over the past five years, and the risk-reward ratio is already established.

The crypto down cycle is nearing historical limits

The current round of crypto trading volume has fallen by 75% from its peak to the current level, lasting for 10 months, which exceeds the median duration of the previous five cycles of 4 months. The crypto market value rebounded by 21% in the past week, although a similar rebound from April to May did not last, Goldman Sachs believes that if the market value can maintain its current level, a turning point in trading volume may arise.

Goldman Sachs’ principal brokerage survey data shows that 35% of institutional investors view regulatory uncertainty as the biggest barrier to entering the crypto market, while 32% believe that regulatory clarity is the primary catalyst for institutional adoption.

Regulatory reform provides institutional support

Although the chances of the CLARITY Act passing before the midterm elections are continuously declining, U.S. regulators are still promoting substantial reforms. The recent proposal for innovation exemptions by the SEC, along with more than 10 new digital asset companies obtaining OCC banking licenses by 2026, means that over 15 crypto companies have entered the federal banking system.

Goldman Sachs believes that the catalytic role of regulatory reform in crypto infrastructure businesses (custody, staking, stablecoins) cannot be ignored, and the real surge in institutional adoption is still pending legislative implementation.

Cost reductions have provided a buffer for profits

Crypto companies have actively cut costs to cope with market downturns. Goldman Sachs estimates that covered targets will average a 5% reduction in expenses by 2026. Many companies reduce expenditures through layoffs, cutting marketing budgets, and optimizing technology infrastructure spending.

The effects of cost reductions are directly reflected in the profitability. Expense reductions have driven an increase in operating profit margins by approximately 5.8 percentage points, which somewhat offsets the impact of declining revenue on profits. This allows crypto companies to maintain positive operating cash flow before a revenue rebound, preserving tactical space for the next cycle.

Four key targets each have their positioning

Goldman Sachs has selected four stocks within the coverage for a buy rating.

HOOD (target price $124): Structural account assets are growing over 20% annually, Rothera predicts that the market exchange will become one of the top three in the industry within two months of launch, contributing approximately $150 million in annual revenue.

IBKR (target price $114, confirmed list in the U.S.): Account growth is expected to exceed 30% by 2026, with 85% of new accounts coming from outside the U.S., and a strong capital generation driven by over 75% pre-tax profit margin.

FIGR (target price $43): The HELOC loan platform's transaction volume in July increased by over 100% year-on-year, with the number of partners rising from 178 in 2025 to 102 in the second quarter of 2026 and still accelerating.

COIN (target price $196): The market share of crypto derivatives has increased by approximately 8 percentage points since the first quarter of 2024, with subscription and service revenue now accounting for about 40% of total revenue. If the SEC's innovation exemption is implemented, its institutional token service capacity will benefit directly. The current forward price-to-earnings ratio is about 28 times, only at the 5% historical percentile since its listing.

The logic of the three types of assets is different: traditional brokers rely on the seasonal reversal in September, predicting the market on the election cycle, while crypto targets depend on market value rebounds, cost reductions, and regulatory reforms as triple catalysts. Goldman Sachs believes that the valuation of the entire sector already reflects enough pessimistic expectations.

Disclaimer

This article is a compilation and interpretation of third-party brokerage research reports (Goldman Sachs, August 24, 2026) by Trend Research, along with publicly available market information. The ratings, target prices, earnings forecasts, and related judgments quoted in the article are solely the views of the analysts of the brokerage and represent the stance of their respective institutions, not that of Trend Research, and do not constitute any investment advice.

The market has risks, and decisions must be independent. This article should not be used as a basis for buying or selling any securities.