Goldman Sachs Targets Prediction Markets & Tokenization in ‘Structural’ Crypto Pivot

Goldman Sachs has moved beyond “selective optimism” to active exploration of prediction markets and tokenization, flagging them as the primary drivers for the crypto industry’s next maturity phase. In a move that validates the sector’s shift from speculation to utility, the bank confirmed it has begun meeting with prediction market platforms to assess integration points for institutional clients.

The Infrastructure Play

The strategic pivot aligns with a research note distributed earlier this month by Goldman analyst James Yaro, who identified these verticals as “structural growth areas” capable of offsetting the cyclical volatility of spot trading. The bank’s thesis is simple: market infrastructure, custody, settlement, and now outcome wagering, offers stickier revenue than simple exchange fees.

Market reaction was swift. Coinbase (COIN), which Goldman upgraded to a “Buy” with a $303 price target based on its positioning in these sectors, surged 8% to ~$255 immediately following the note. Yaro’s team projects the exchange’s revenue will compound at 12% annually through 2027, significantly outpacing the 8% industry average, largely due to its capture of the tokenization stack.

The shift to infrastructure businesses earns revenue regardless of whether crypto prices are rising or falling. These include services such as custody, staking, and settlement.

Institutionalizing the ‘Yes/No’ Market

Goldman’s interest in prediction markets, historically a retail-dominated niche, signals a potential sea change for platforms like Polymarket or Kalshi. While the bank has not named specific partners, the engagement suggests a desire to clear outcome-based derivatives for sophisticated counterparties. This would move prediction markets from “internet gambling” to a recognized hedging instrument for event risk (e.g., elections, rate cuts).

The RWA Mandate

This push is consistent with the long-term strategy of Mathew McDermott, Goldman’s Global Head of Digital Assets, who has repeatedly emphasized the “digitization of opportunity” via real-world assets (RWA). The bank currently forecasts the stablecoin market, the bedrock of tokenization liquidity, to balloon to $420 billion, providing the necessary plumbing for on-chain collateral mobility.

By prioritizing these sectors, Goldman is effectively shorting volatility and going long on plumbing. The message to the street is clear: The alpha isn’t in the token price; it’s in the rails that move it.