Brokerage and crypto-related stocks outperformed market expectations in the post-second-quarter earnings season.

According to Goldman Sachs, since the first company in the sector reported second-quarter earnings on July 21, the average stock price of its coverage companies has risen by 3%, outperforming the S&P 500 index by about 1 percentage point. Second-quarter industry earnings exceeded market expectations by 8% and revenues by 2%, but costs were also 5% higher.

Goldman Sachs maintains a cautiously optimistic view for the second half. The core support for this judgment is not that crypto trading has already recovered, but that both traditional brokerage business and predictive markets have structural growth and autumn recovery potential. The recent rise in crypto asset market capitalization leaves additional upside potential for the industry.

Valuation also provides some margin of safety. The current sector's forward P/E ratio is around 24 times, and EV/EBITDA is around 14.5 times, both at around the 30th percentile over the past five years. Goldman Sachs believes that if trading volume improves from September, there is still room for sector revaluation.

Summer Trading Cools Down, Cycle May Not Have Peaked Yet

In July and August, U.S. retail stock trading volumes decreased by about 15% and 14% month-on-month, respectively. Against the backdrop of stock trading volumes and margin balances in the second quarter being approximately 40% and 100% higher than the 2021 peak, the market is starting to worry whether the current retail trading cycle has peaked.

Goldman Sachs' assessment is relatively mild. The report suggests that while absolute trading volumes hit a new high, some were due to the expansion of brokerage platform scale. From 2023 to 2025, major brokerage account numbers are expected to grow by approximately 13% annually, and client assets by about 40% annually. After adjusting for account growth, per-account trading volume in the second quarter of 2026 is still about 8% lower than the peak of the 2021 cycle.

The funding balance shows a similar trend. While its absolute size has significantly exceeded that of 2021, the funding balance as a percentage of client assets remains below the previous peak. Given the historical strong correlation between funding balances and retail stock trading volumes, Goldman Sachs concludes that there is still room for further expansion in this cycle, although the growth rate may slow down.

Seasonality also needs to be taken into account. July and August are typically the weakest months for annual retail trading, and this year's decline is more pronounced than historical seasonality, but some trading may have already been front-loaded into June. Stock market activity was active during the month, driving retail participation and trading volumes to record levels.

Goldman Sachs expects the U.S. stock issuance volume to reach a record $675 billion in 2026, with second-quarter issuance of around $252 billion. Historical data shows that stock issuance activity usually lags by about a quarter, driving retail trading and also benefiting securities lending, stock trading, and IPO subscription businesses.

Based on seasonal adjustments and stock issuance activity, Goldman Sachs expects third-quarter traditional retail brokerage commissions to grow by 28% year-on-year, with average stock and options trading volumes increasing by approximately 19%. This forecast still depends on whether September trading activity will recover as expected.

Market Forecasting's Autumn Resilience May Be Stronger

Goldman Sachs believes that market forecasting has both structural growth and cyclical recovery potential, and the rebound in autumn trading activity may be more pronounced than in traditional brokerage business.

From January 2024 to July 2026, the annualized trading volume of market forecasting has grown by approximately 1160%. Since August 2025, monthly active users have shown a month-on-month increase in all months except April 2026, indicating that the user base is still expanding.

The rapid growth has at times overshadowed the seasonality of market forecasting. According to data provided by Goldman Sachs, sports, crypto, and political contracts account for the majority of trading volume. In July 2026, sports contracts represented approximately 79% of industry trading volume, crypto contracts around 15%, and political contracts about 2%.

These three types of contracts are driven by different cycles. Sports contracts usually see an uptick after the resumption of major U.S. professional leagues, with relative activity from September to January of the following year; political contracts see increased volume as elections approach; and crypto event contracts are influenced by coin prices and the crypto market's trading cycles.

Due to fewer summer sports events and the U.S. midterms trading not yet reaching its peak, the trading volume in August prediction markets saw a month-over-month decline of about 15%. Goldman Sachs attributed this mainly to the seasonality of underlying event contracts rather than a termination of structural industry growth.

Starting from September, the U.S. sports schedule resumes, and the midterms draw near. If crypto market activity also improves simultaneously, the three main contract types may experience a stacking effect. However, as a less than three-year-old asset class, the prediction market still has limited historical data, and further observation is needed to assess the stability of seasonal patterns.

Crypto Market Cap Rebounds, Yet to Translate into Trading Volume

Compared to traditional trading and prediction markets, Goldman Sachs is more cautious about crypto trading.

The crypto industry's trading volume decreased by 30% month-over-month in July, with a further 21% decrease from August to the present. This downward trend has persisted for about 10 months, exceeding the median of around 4 months from peak to trough in the past five crypto cycles.

According to report statistics, in the past six crypto cycles, the total market cap and trading volume each dropped by around 51% and 66% on average; in the current cycle until the report's publication, they have dropped by about 40% and 75%, respectively. This indicates that the contraction in crypto trading activity has exceeded historical averages, but solely based on the decline and duration, it is still inconclusive whether the cycle has bottomed out.

A positive signal comes from asset prices. In the week before the report was released, the total market cap of crypto assets increased by around 21%. Goldman Sachs believes that if the total market cap can sustain its current level for a considerable period, trading volume may rebound as risk appetite improves.

The key here is "sustain." From April to May this year, crypto asset market cap also briefly increased by about 5%, but then fell back, and trading volume did not experience a sustained rebound. Therefore, the recent market cap increase only enhances the possibility of a trading recovery, but is not yet sufficient evidence of a trend reversal.

The impact on brokerage firms and crypto companies has not been entirely the same. According to Goldman Sachs, the median correlation between the stock prices of crypto-related companies and the total crypto market value has been around 36% since 2026. Platforms with more diversified businesses, such as Robinhood and Figure, have historically had a relatively lower correlation with crypto prices; Coinbase's business resilience is more direct.

Regulatory Reform Continues to Advance, but Institutional Entry Still Requires Legislation

Regulation is another variable in whether the crypto market can transition from cyclical rebounds to structural expansion.

Goldman Sachs believes that the likelihood of the U.S. Congress passing the "CLARITY Act" crypto market structure legislation during this term is decreasing. The Senate failed to vote before the August recess, and the midterm elections and subsequent congressional recess further compressed the legislative timeline.

Meanwhile, U.S. regulatory agencies are still advancing some reforms. The SEC recently proposed a digital asset "Innovation Exemption," planning to provide temporary registration and qualification exemptions for qualifying digital asset issuers and securities. The OCC continues to approve digital asset companies for trust bank charters, enabling them to engage in activities such as fund transfers and asset custody.

These measures may promote applications such as tokenization, custody, and decentralized finance expansion, but Goldman Sachs emphasizes that administrative regulation continuity is weaker than congressional legislation. To drive institutional large-scale adoption of digital assets, the market still needs a more stable, clear legal framework.

Goldman Sachs' 2025 institutional survey shows that 35% of surveyed managers consider the lack of regulatory clarity as the biggest barrier to entering the crypto market, with 32% ranking regulatory clarity as the top catalyst to drive institutional adoption. Therefore, short-term adjustments by regulatory agencies can improve the market environment, but congressional legislative progress is the key indicator of whether institutional funds can enter the system systematically.

Platforms are Seeking Revenue Beyond Crypto Trading

In the context of a downturn in crypto trading, related companies are primarily stabilizing profits in two ways: cost compression and developing new businesses with lower correlation to spot trading volume.

According to Goldman Sachs' estimation, by 2026, five brokerage firms and crypto companies have taken cost adjustment measures, averaging about a 4% to 5% annual expense reduction, providing approximately 5.8 percentage points support to post-adjustment operating profit margins. Cost control has not completely offset the decline in revenue but has mitigated the impact of the trading downturn on profitability.

Looking at individual stocks, Goldman Sachs' top picks are FIGR, HOOD, and IBKR, with COIN seen as an upward play for the crypto market recovery.

Robinhood's core logic is asset growth and business diversification. Goldman Sachs expects HOOD's average revenue per user to grow at a compound annual rate of approximately 16% from 2025 to 2028, with customer assets and revenue growing by around 29% and 21%, respectively. Growth drivers include traditional brokerage, prediction markets, digital banking, credit cards, and wealth management.

Among these, the prediction market is expected to contribute about 13% of HOOD's revenue in 2026. Its newly established Rothera prediction market exchange has gained approximately a 3 percentage point market share in less than two months since launch, translating to an annualized revenue of around $150 million, as estimated in the report. While the prediction market is growing rapidly, and despite the short time since its platform's inception, the sustainability of its current share remains to be seen.

Figure's main growth driver is home equity line of credit (HELOC) loans, specifically in the HELOC market. From the third quarter onwards, its consumer loan market trading volume continues to grow at a rate exceeding 100% year-on-year. Goldman Sachs believes that the company's decline in overall fee rates is primarily due to changes in product structure and channels, rather than just price cuts: the fee rate is lower for large first-lien HELOCs, and the FIGR Connect business, which has lower fees, also has a higher profit margin.

Interactive Brokers' strength lies in its globalization. As of 2026, over 75% of its monthly active users and about 85% of app downloads come from markets outside the United States. Goldman Sachs predicts that IBKR's account numbers will grow by 33%, 24%, and 21% in 2026, 2027, and 2028, respectively, with an average annual revenue growth of 15% from 2025 to 2028. Global account growth and a pre-tax profit margin of over 75% make it relatively less sensitive to crypto price fluctuations.

Coinbase provides a more direct exposure to the crypto market's volatility. Since the first quarter of 2024, the company has increased its market share in the crypto derivatives market by around 8 percentage points; subscription and service businesses such as stablecoins, custody, staking, and Prime Brokerage have contributed about 40% of the revenue in 2025. These revenues have relatively low correlation with crypto trading volume.

COIN is also expanding into prediction markets, stock trading, banking, and wealth management businesses. Currently, the revenue contribution from these products is limited, so Goldman Sachs mainly sees them as potential upside opportunities rather than realized sources of profit.

What to Watch Next?

Goldman Sachs' optimism toward brokerages and crypto stocks is based on several yet-to-be-validated conditions.

Firstly, whether September's retail stock and options trading volumes can shake off the summer lull will determine if the seasonal recovery of traditional brokerage business holds true. Secondly, whether sports events and midterm elections can drive volume in prediction market trading will test whether the prediction market is a sustainable new business or a temporarily high-growth category.

The crypto market needs to meet both price and volume conditions. Maintaining a high total market value is just the first step; only when spot and derivative trading volumes subsequently recover will the trading revenue of relevant companies truly improve. On the regulatory front, continued rule relaxation by administrative agencies can support short-term innovation, and whether Congress can establish a stable market structure bill still determines the institutional adoption ceiling.

The current sector valuations have retreated, but the growth quality within the industry varies. FIGR, HOOD, and IBKR rely on loans, prediction markets, and global account growth to provide relatively independent fundamentals; COIN, on the other hand, retains a higher level of crypto cycle resilience.

Therefore, this report's bet is not on the restart of a crypto bull market. Goldman Sachs places more emphasis on brokerages and crypto platforms diversifying their revenue sources away from a single trading cycle. What needs to be validated next is whether these new businesses can continue to support growth after the autumn trading uptick.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia