Goldman Sachs Is Cautiously Optimistic on Brokerage and Crypto-Asset Stocks in 2H26, Supported Primarily by a Fall Trading Recovery and Prediction-Market Growth

Overview

The report assesses the 2H26 growth outlook for traditional brokerages, prediction markets, and crypto-asset platforms in the Americas. Goldman Sachs' core view is that retail brokerages and prediction markets benefit from both structural expansion and cyclical improvement in the fall, while crypto trading requires market capitalization to remain elevated for longer to confirm an inflection point. Gradual regulatory reform, expense control, and valuations at relatively low historical levels provide additional support.

Core views

The covered brokerage and crypto-asset stocks have risen by an average of 3% since July 21, 2026, when the first company in the group reported earnings, outperforming the S&P 500 by 1 percentage point. Overall 2Q26 earnings for covered companies exceeded consensus expectations by 8%, driven by revenue coming in 2% higher, partly offset by expenses coming in 5% higher. Despite traditional retail trading entering the late-summer slowdown and crypto trading remaining weak until the past week, Goldman Sachs remains cautiously optimistic from both structural and cyclical perspectives. The group's average Goldman Sachs-adjusted P/E and EV/EBITDA multiples are at approximately the 30th percentile of the past five years, and the report considers valuations attractive. For traditional retail brokerages, industry proxies for retail equity trading declined 15% and 14% MoM in July and August, respectively, prompting debate over whether the trading cycle has already peaked. The report believes some activity was pulled forward into a record June by the strong ECM market, while July and August are historically weak months and seasonality typically turns positive in September. Although 2Q26 trading volume and margin financing balances were approximately 40% and 100% above 2021 levels, respectively, after adjusting for account growth since 2021, 2Q26 trading volume per account remained 8% below the prior cycle peak. Margin financing balances as a share of client assets were also below the previous peak, while margin balances have historically been highly correlated with trading volume. Brokerage accounts and client assets grew at annualized rates of approximately 13% and 40%, respectively, from 2023 to 2025, providing a foundation for structural expansion. ECM issuance generally supports retail trading with a one-quarter lag, and Goldman Sachs' portfolio strategy team expects 2026E equity issuance to reach a record of approximately $675 billion, following $252 billion of issuance in 2Q26. Accordingly, the report expects at least a historically typical, and potentially stronger, trading rebound in September and maintains its forecast for 28% YoY growth in traditional retail brokerage commission revenue and an average 19% YoY increase in traditional brokerage equity and options trading volumes in 3Q26E. Structural and seasonal growth in prediction markets may be even stronger. Industry trading volume grew at an annualized rate of approximately 1,160% from January 2024 to July 2026. Monthly unique users have increased sequentially every month since August 2025 except April 2026, while maintaining strong YoY growth in every month since August 2025. Rapid expansion has obscured the product's underlying seasonality: sports, political, and crypto themes represented 79%, 2%, and 15% of July trading volume, respectively. The first two are driven by sports schedules and election cycles, while crypto themes are distinctly cyclical. Industry trading volume has declined approximately 15% MoM in August to date, but the historical performance of US online sports-betting revenue shows that September through January is typically strong, while political event contracts also gain momentum as elections approach. Goldman Sachs therefore expects a more pronounced-than-usual positive inflection in prediction markets as the fall begins in September. If crypto trading recovers, crypto event contracts would receive additional support. The outlook for crypto trading remains uncertain, but the recent market-cap rebound increases the probability of an upside scenario. Across the past six cycles, crypto trading volume and total market capitalization declined by an average of approximately 65% and 50%, respectively; in the current cycle, they have fallen approximately 75% and 40%. Industry trading volume declined 30% MoM in July and another 21% in August to date. The current trading-volume downturn has lasted 10 months, longer than the four-month median peak-to-trough duration of the previous five cycles. Total crypto-asset market capitalization rose 21% over the past week, but the report emphasizes that a one-week rebound is insufficient to confirm an inflection point. Market capitalization rose 5% from April to May 2026 before retreating, and trading volume did not establish a sustained uptrend. Goldman Sachs defines a meaningful trading-volume rebound as an increase of more than 10% from the trough or three consecutive months of sequential growth. It is therefore necessary to observe whether market capitalization can remain at higher levels for long enough. Regulatory reform can drive ecosystem expansion, but administrative regulatory measures cannot fully substitute for legislation. Because the Senate did not vote on the CLARITY market-structure bill before its August recess, the midterm elections and subsequent recesses have narrowed the window for the current Congress to pass the legislation. Meanwhile, if implemented as originally proposed, the US Securities and Exchange Commission's innovation exemption could temporarily ease certain registration and qualification requirements for some digital-asset issuers and securities, promoting non-trading use cases such as tokenization and decentralized finance. Another 10 digital-asset companies received new OCC banking charters in 2026, bringing the total approved since 2021 to more than 15. The charters grant money-transmission and asset-custody authority and strengthen connections between the crypto ecosystem and the US federal banking system. However, Goldman Sachs' 2025 survey of more than 90 institutional clients found that 35% of respondents viewed regulatory uncertainty as the greatest barrier to entering the crypto market, while 32% identified regulatory clarity as the leading catalyst for institutional crypto adoption. The report therefore believes that fully unlocking institutional adoption and innovation still depends on congressional legislation. Expense controls have cushioned the decline in crypto revenue but are insufficient to fully offset operating pressure. Total crypto-asset market capitalization has declined 12% year to date, while spot and derivatives trading volumes have fallen 65% and 60%, respectively, leading the market to reduce revenue forecasts substantially. The report estimates that covered companies have reduced total 2026 expenses by an average of approximately 5%, contributing about 5.8 percentage points to adjusted operating margins. Among the five brokerage and crypto companies that took explicit cost-reduction actions, annualized expenses are expected to decline by an average of approximately 4%. This expense leverage only partially offsets reductions in revenue forecasts and does not change the fact that the industry still requires an improvement in trading activity. At the stock level, Goldman Sachs' top Buy-rated picks are HOOD, FIGR, IBKR, and COIN. HOOD benefits from retail trading, prediction markets, and new-product expansion. Average revenue per user is expected to grow 16% from 2025 to 2028E, while the company maintains its 20% annualized net-deposit growth target. Prediction markets are expected to contribute 13% of 2026E revenue, and its joint-venture exchange Rothera became the third-largest prediction-market exchange less than two months after launch, with approximately $150 million in annualized revenue. Goldman Sachs expects HOOD's client assets and revenue to grow at CAGRs of 29% and 21%, respectively, from 2025 to 2028E, above the approximately 13% peer revenue growth rate, while its 2026E adjusted EPS forecast is 2% above consensus. FIGR's core thesis is the structural expansion of tokenized HELOC lending and its capital-light marketplace platform, with relatively limited exposure to crypto-asset volatility. The source report lists the number of origination partners as 73/178 in 2024/2025, followed by 80 in 1Q26 and 102 in 2Q26. Trading volume in 3Q26 to date still represents growth of more than 100% YoY and 17% sequentially to approximately $5 billion. FIGR Connect now accounts for 65% of total trading volume, approaching the 70% target. The decline in the blended take rate primarily reflects discounts for large clients, changes in product mix, and migration toward FIGR Connect, which has a lower take rate but the highest margins, rather than direct price reductions. The company achieved a 50% revenue CAGR from 2022 to 2025, and Goldman Sachs expects a further 38% CAGR from 2025 to 2028E. Its approximately 23.0x adjusted Q5-Q8 P/E is above the peer average of approximately 19.5x, but the report believes its 23-percentage-point revenue-growth premium is sufficient to support the valuation premium. IBKR relies on globalization and sustained marketing to expand accounts, with 2026E account growth expected to exceed 30% YoY, above the company's 20%-25% target. Approximately 85% of new accounts come from outside the United States, the largest individual non-US country accounts for only about 5% of app downloads, and the company's account share remains in the low single digits across major regions in the Americas, Europe, and Asia, indicating substantial room for expansion. It is also investing in prime brokerage, prediction markets, and RIA technology, while participating in the event-contract market through its ownership of ForecastEx. Goldman Sachs expects IBKR to deliver a 27% account CAGR from 2025 to 2028E, versus only 8% for peers, and a 15% revenue CAGR. COIN provides upside optionality if crypto market capitalization and trading volumes continue to recover, while maintaining company-specific growth across new businesses including derivatives, prediction markets, tokenization services, infrastructure, and subscription services. The report notes that its subscription and services business has a significantly lower correlation with fluctuations in crypto trading volumes. Target-price revisions reflect changes in valuations and industry scenarios. HOOD's target price increased from $123 to $124, IBKR remained at $114, FIGR increased from $40 to $43, and COIN increased from $173 to $196. Relative to prices as of August 20, 2026, these imply potential upside of 30%, 27%, 19%, and 14%, respectively. Among Neutral-rated companies, ETOR's target price decreased from $36 to $32, GLXY increased from $23.50 to $25, WLTH remained at $9.50, BTGO increased from $5.75 to $6.50, and CRCL increased from $71 to $81. GEMI retained its Sell rating and $3.50 target price. COIN's target P/E increased from 25.0x to 29.5x, while FIGR's increased from 25.0x to 25.5x. GLXY is valued using a sum-of-the-parts approach, applying a 23.0x Q5-Q8 adjusted P/E to digital assets, a 14.5x Q5-Q8 adjusted EV/EBITDA multiple to data centers, and a 1.0x Q5 price-to-book multiple to the corporate segment.

Analysis framework

Goldman Sachs first reviews 2Q26 results and variances versus market consensus, then separates trading activity into long-term platform expansion, short-term cyclical changes, and monthly seasonality. For traditional brokerages, it adjusts historical trading volumes and margin balances for growth in accounts and client assets and incorporates the lagged impact of ECM issuance. For prediction markets, it analyzes the trading mix across sports, political, and crypto themes, using sports betting and election cycles as seasonal references. For crypto, it compares historical downturns in market capitalization and trading volume and establishes criteria for confirming a rebound. The report then assesses the impact of regulatory events and expense reductions on revenue, adoption, and margins, before combining growth forecasts, peer valuations, and historical valuation ranges to derive stock selections and target prices.

Methodology notes

• Cycle and Business-Conditions FrameworkBusiness-Cycle Inflection Analysis

  Joint analysis of structural growth, cyclical changes, and seasonality

  The report examines long-term account and user expansion separately from monthly peak and off-peak seasons and crypto cycles to determine when activity may inflect for traditional brokerages, prediction markets, and crypto trading.

• (Out-of-Vocabulary Method)

  Adjusting historical peaks for account and client-asset growth

  Rather than comparing only the absolute values of trading volume and margin balances, the report also divides them by account or client-asset scale to determine whether current per-client activity has truly exceeded the 2021 cycle peak.

• Event Strategy and Behavioral FinanceEvent-driven analysis

  ECM issuance, sports schedules, elections, and regulatory-event drivers

  The report uses the lagged impact of equity issuance, the resumption of sports leagues, approaching elections, and changes in regulatory rules to explain potential short-term catalysts for trading volume and digital-asset adoption.

• Corporate Fundamentals and Financial FrameworkOperating/Financial Leverage Analysis

  The buffering effect of expense reductions on operating margins

  The report estimates the accretion to adjusted operating margins from expense reductions by digital-asset companies to assess the extent to which cost controls can offset revenue forecast reductions.

• Valuation MethodPE/PEG valuation

  Historical and peer P/E valuation

  The report compares the group's adjusted P/E multiples with their five-year historical percentiles and assigns different Q5-Q8 target P/E multiples to companies based on growth differentials to derive target prices.

• Valuation MethodEV/EBITDA valuation

  Enterprise-value multiple valuation

  The report uses EV/EBITDA to assess the group's valuation relative to historical levels and applies target EV/adjusted EBITDA multiples to GLXY's data-center business and companies such as BTGO.

• Valuation MethodSOTP Valuation

  GLXY sum-of-the-parts valuation

  GLXY's target price values the digital-assets, data-center, and corporate segments separately and then sums their values to reflect differences in business characteristics and applicable multiples.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• HOOD

  Buy-rated top pick, benefiting from retail trading, prediction markets, and the expansion of new businesses such as digital banking and wealth management.

  Strengths

  20% annualized net-deposit target and rapid pace of product launches; client assets and revenue are expected to grow at CAGRs of 29% and 21%, respectively, from 2025 to 2028E.

  Weaknesses

  Revenue remains exposed to the retail-trading cycle and the pace at which new businesses deliver results.

  Comparison

  Expected revenue growth exceeds the peer annualized rate of approximately 13%; target price of $124, implying 30% potential upside.

  Risks

  If retail trading does not recover in the fall or prediction-market expansion slows, the expected revenue inflection could be delayed.

• FIGR

  Buy-rated top pick whose core HELOC marketplace platform offers structural growth and is relatively insulated from crypto-asset volatility.

  Strengths

  Trading volume in 3Q26 to date has grown by more than 100% YoY, FIGR Connect accounts for 65% of total trading volume, and 2025-2028E revenue CAGR is expected to be 38%.

  Weaknesses

  The blended take rate is declining because of client discounts, product mix, and migration toward the capital-light platform.

  Comparison

  Its approximately 23.0x adjusted Q5-Q8 P/E is above the peer average of approximately 19.5x, but revenue growth is expected to exceed peers by 23 percentage points; target price of $43.

  Risks

  Partner expansion, loan trading volume, or migration to FIGR Connect may fall short of expectations.

• IBKR

  Buy-rated top pick included on the Americas Conviction List, benefiting from global account expansion and a recovery in traditional brokerage activity.

  Strengths

  Approximately 85% of new accounts come from outside the United States, the 2025-2028E account CAGR is expected to be 27%, and the company is expanding into prime brokerage, ForecastEx prediction markets, and RIA technology.

  Weaknesses

  Growth still depends on global client acquisition, trading activity, and new-business expansion.

  Comparison

  The projected account CAGR is significantly above the peer rate of 8%; target price of $114, implying 27% potential upside.

  Risks

  The seasonal trading rebound or global account growth may fall short of expectations.

• COIN

  Buy-rated top pick offering upside optionality from a sustained recovery in crypto market capitalization and trading volumes.

  Strengths

  Derivatives, prediction markets, tokenization services, infrastructure, and subscription services continue to expand, while subscription and services revenue has a lower correlation with trading-volume fluctuations.

  Weaknesses

  Spot and derivatives trading volumes remain in a significant downturn.

  Comparison

  The target price increased from $173 to $196 and the target P/E from 25.0x to 29.5x, implying 14% potential upside.

  Risks

  If the crypto market-cap rebound reverses again, trading volumes fail to confirm an inflection, or regulatory legislation stalls, earnings upside may not materialize.

• ETOR

  Neutral-rated, with the target price reduced from $36 to $32.

  Weaknesses

  The target valuation multiple was reduced from 9.0x to 8.0x.

  Comparison

  The price as of August 20, 2026 was $29.67, implying 8% potential upside.

• GLXY

  Neutral-rated, with the target price increased from $23.50 to $25.

  Strengths

  The digital-assets and data-center businesses can be valued separately.

  Weaknesses

  Performance is sensitive to the digital-asset environment.

  Comparison

  Uses a sum-of-the-parts valuation for the digital-assets, data-center, and corporate segments, implying 7% potential upside.

  Risks

  Changes in the crypto market and valuation multiples for each segment.

• WLTH

  Neutral-rated, with the target price maintained at $9.50.

  Comparison

  The price as of August 20, 2026 was $9.16, implying 4% potential upside.

• BTGO

  Neutral-rated, with the target price increased from $5.75 to $6.50.

  Strengths

  The target valuation multiple was increased due to improvement in total crypto-asset market capitalization.

  Weaknesses

  The target price remains slightly below the $6.60 price as of August 20, 2026.

  Comparison

  Target EV/adjusted EBITDA increased from 11.5x to 12.0x, implying a potential return of approximately -2%.

  Risks

  If the recent improvement in crypto market capitalization does not persist, the basis for the valuation increase may weaken.

• CRCL

  Neutral-rated, with the target price increased from $71 to $81.

  Weaknesses

  The target price is below the $83.66 price as of August 20, 2026.

  Comparison

  The target P/E increased from 29.5x to 34.0x, implying a potential return of -3%.

• GEMI

  Maintains a Sell rating and a $3.50 target price.

  Weaknesses

  The target price is below the $4.14 price as of August 20, 2026.

  Comparison

  Potential return of -15%.

  Risks

  A persistently difficult crypto operating environment and continued losses.

Key data

• Recent Performance of Covered StocksUp 3% on average, outperforming the S&P 500 by 1 percentage pointFrom July 21, 2026 to the report's observation date
• 2Q26 Earnings Versus Consensus+8%Revenue was 2% higher, partly offset by expenses being 5% higher
• 3Q26E Traditional Brokerage Commission Growth+28% YoYGoldman Sachs forecast
• 3Q26E Traditional Brokerage Trading-Volume Growth+19% YoYAverage increase in equity and options trading volumes
• 2026E Equity IssuanceApproximately $675bnGoldman Sachs portfolio strategy team forecast; 2Q26 issuance was $252bn
• Structural Prediction-Market GrowthApproximately 1,160% annualized growthIndustry trading volume from January 2024 to July 2026
• Prediction-Market Trading Volume in August to DateApproximately -15% MoMPrimarily affected by summer seasonality in sports and political event contracts
• Change in Crypto Trading VolumeJuly -30%, August to date -21% MoMExtending a ten-month cyclical downturn
• Recent Total Crypto-Asset Market Capitalization+21% over the past weekThe report believes elevated levels must persist to confirm a trading-volume inflection
• Crypto-Cycle ComparisonCurrent-cycle trading volume/market cap approximately -75%/-40%Average of approximately -65%/-50% across the past six cycles
• Expense Reductions and MarginsExpenses approximately -5%, operating margin approximately +5.8ppAverage estimate for covered digital-asset companies
• Regulatory Barrier to Institutional Adoption35%Share of institutions in Goldman Sachs' 2025 survey that identified regulatory uncertainty as the greatest barrier to entry
• Regulatory Catalyst for Institutional Adoption32%Share of institutions that identified regulatory clarity as the leading catalyst
• Group Valuation PositionApproximately the 30th percentile of the past five yearsBased on Goldman Sachs-adjusted P/E and EV/EBITDA

Impact & implications

The report believes the principal earnings support in 2H26 will not come from a crypto rebound alone, but from expanding traditional brokerage accounts and assets, trading seasonality after September, rapid prediction-market penetration, and the lagged contribution of ECM issuance. If crypto market capitalization can remain at elevated levels, it will provide additional upside optionality for companies such as COIN. Gradual regulatory reforms will help expand the ecosystem, but large-scale institutional adoption will still depend on congressional legislation. Expense controls can cushion margin pressure but cannot fully substitute for a revenue recovery.

Risks

• Traditional retail trading was weaker than normal seasonality in July and August, and the September rebound may fall short of expectations.
• Crypto market capitalization has previously experienced false starts that failed to drive a sustained recovery in trading volume, and the recent 21% rebound could also reverse.
• The window for passage of the CLARITY market-structure bill by the current US Congress continues to narrow.
• Temporary regulatory exemptions and banking charters are less durable than formal legislation and may be insufficient to unlock large-scale institutional adoption.
• Expense reductions can only partially offset revenue forecast cuts and cannot fully protect against a weak crypto-trading environment.
• Sports, political, and crypto themes in prediction markets are all seasonal or cyclical, and trading volumes may fluctuate significantly.

What to watch

• Monitor whether traditional retail trading volume begins a seasonal rebound in September 2026 that matches or exceeds historical patterns.
• Track whether record ECM issuance translates into retail trading, securities lending, and IPO participation revenue with the historical lag of approximately one quarter.
• Monitor whether prediction markets recover from the approximately 15% MoM decline in August as sports leagues resume and the US midterm elections approach.
• Track whether total crypto-asset market capitalization can remain at elevated levels and whether trading volume rebounds by more than 10% from the trough or grows sequentially for three consecutive months.
• Watch the final implementation of the SEC innovation exemption, OCC charter approvals, and congressional progress on the CLARITY bill.
• Monitor whether expense reductions by digital-asset companies continue to cushion revenue downgrades without weakening new-product and ecosystem expansion.