Coinbase’s 5 Predictions for the Crypto Market in 2025
Coinbase recently released a report outlining its predictions for the cryptocurrency market through 2025. The report focuses on stablecoins, TokenizationETF, Decentralized Financeand regulatory dynamics.
Reports from other industry players also indicate a positive outlook for the cryptocurrency market in 2025.
Favorable regulatory environment will drive market growth
The first major prediction highlights that regulatory changes will benefit the entire cryptocurrency market. Coinbase calls the incoming U.S. Congress “the most crypto-friendly U.S. Congress ever.” In potential development, establish a Bitcoin strategic reserve may become a reality.
It’s worth noting that the pro-cryptocurrency movement is not limited to the United States. Regions such as Europe, the G20, the UK, the UAE, Hong Kong and Singapore are actively developing regulations to support digital assets.
Binance CEO Richard Teng also predicted Regulatory changes in the United States will be a catalyst for growth in 2025, and other countries may follow suit.
Positive Developments in Cryptocurrency ETFs
Coinbase emphasizes its importance Bitcoin and Ethereum ETFs in attracting new capital. Data shows that net inflows have reached US$30.7 billion since its launch.
The report also shows ETFs linked to assets such as XRP, SOL, LTC and HBAR may be approved, although their benefits may be short-term.
Crucially, Coinbase speculates that the SEC may approve staking of ETFs or eliminate the requirement to create and redeem ETF shares with cash, potentially expanding the ETF market. SEC Commissioner Hester Pierce hinted These developments could happen “sooner than later.”
Global adoption of stablecoins
Coinbase predicts highly optimistic scenario for adoption of the technology Stablecoin. The market value of stablecoins exceeds $190 billion and currently accounts for 0.9% of the U.S. M2 money supply.
The report predicts that stablecoins may grow in speed and cost efficiency compared to traditional methods, accounting for 14% of the US$21 trillion M2 supply.
“In fact, we may well be getting closer to the day when the first and primary use case for stablecoins is not just transactions, but global capital flows and commerce.” Coinbase predicts.
Tokenization thrives amid regulatory challenges
Coinbase expects tokenized assets to continue growing in 2025. Capitalization of tokenized real-world assets (RWA) has grown by more than 60% in the past year, reaching nearly $14 billion.
It is estimated that RWA capital, backed by traditional financial giants such as BlackRock and Franklin Templeton, could grow by at least $2 trillion over the next five years.
The tokenization trend has expanded beyond traditional assets such as U.S. Treasuries and money market funds into areas such as private credit, commodities, corporate bonds, real estate and insurance.
“Ultimately, we believe tokenization can simplify the entire portfolio construction and investment process by putting it on-chain, although this may still be several years away. Of course, these efforts come with a unique set of challenges, including across multiple Chain liquidity fragmentation and ongoing regulatory hurdles,” Coinbase predicts.
Messari Report Echoing these sentiments, predicts Bitcoin and tokenization risk weighted assets will dominate discussions in 2025.
DeFi will rebound in 2025
Despite the market cap peaking at over $3.7 trillion, DeFi’s total value locked (TVL) has yet to return to its previous high of $200 billion; it currently stands at $120 billion.
Coinbase believes that DeFi faced significant challenges in the last cycle as many protocols provided unsustainable returns. However, regulatory changes in the United States may allow DeFi Protocol Share revenue with token holders to fuel revitalization.
The report also cited comments from Federal Reserve Governor Christopher Waller, who said DeFi could complement centralized finance (CeFi): Distributed Ledger Technology (DLT) to improve data storage efficiency.
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