Goldman Sachs believes that regulatory clarity will significantly boost institutional adoption of cryptocurrency. The bank identifies regulatory reform as the primary catalyst for this shift. Many firms in the crypto infrastructure space stand to gain, as they are less affected by market volatility compared to trading-focused companies. Upcoming U.S. market structure legislation in 2026 could prove critical by clarifying regulations around tokenization and decentralized finance (DeFi), potentially unlocking institutional capital. The report points out that regulatory uncertainty is the largest obstacle for institutions, with 35% of surveyed firms citing it as the main hurdle to adoption. Despite the growing interest, institutional asset managers currently allocate only about 7% of their assets to crypto. However, 71% plan to increase their exposure in the coming year. The approval of exchange-traded funds (ETFs) in 2024 has already accelerated adoption. The report also highlights the significance of stablecoin legislation and changes in banking regulations, which have lowered barriers for traditional financial institutions. In a related note, BlackRock's head of digital assets, Robert Mitchnick, raised concerns about the impact of leverage on bitcoin's stability as an investment. He argued that excessive use of leverage in derivatives trading is undermining bitcoin's image as a stable asset for conservative investors. While he emphasized the strong fundamentals of bitcoin, he noted that its trading patterns are increasingly resembling those of speculative markets like the NASDAQ.