As 2025 Approaches Its Second Half, Coinbase’s Latest Report Indicates a Turning Point in the Cryptocurrency Market
Despite rising U.S. Treasury yields and potential sell pressures from some crypto firms, the overall environment remains favorable. The primary reasons include a U.S. economy performing better than expected, the Federal Reserve (Fed) likely poised to lower interest rates, a growing trend of Bitcoin corporate reserves, and the simultaneous advancement of stablecoin and market structure legislation in the United States, which will drive a bullish trend for Bitcoin.
U.S. Economic Stabilization and Diminishing Recession Concerns
The report states that earlier this year, concerns about a “technical recession” emerged due to Trump’s return to the White House, threats to global allies regarding “high tariffs” to restart trade negotiations, and heightened U.S.-China trade tensions, compounded by a 0.2% decline in Q1 GDP annualized rate, which further troubled the markets.
However, according to the Atlanta Fed’s GDPNow model, the U.S. Q2 growth rate has been revised up to 3.8%, indicating strong economic momentum. Even if a slowdown follows, the market expects only a slight cooling, without a repeat of the 2008 financial crisis collapse. As the U.S. M2 money supply and global central bank assets expand simultaneously, asset prices also receive strong support.
Market Resilience Evident in Recent Corrections
The following chart indicates that during this round of corrections in 2025:
“Although Bitcoin and the Coinbase cryptocurrency market index COIN50 experienced declines, volatility is significantly lower than in the past, indicating improved market resilience and a more stable overall response compared to previous financial crises.”
Accounting Standards Shift: Bitcoin Becomes a New Favorite for Corporate Assets
The report notes that the Financial Accounting Standards Board (FASB) will begin relaxing accounting standards starting at the end of 2024, allowing companies to value cryptocurrency assets at market prices, enabling profit recognition without the need to sell. This encourages more companies to enter the market. The following chart illustrates:
“Since 2024, the number of Bitcoin wallets holding over a million dollars has surged, and with prices breaking the $100,000 mark, many high-net-worth players have been gradually increasing their positions, strengthening the market consensus on Bitcoin as a reserve asset.”
Debt Issuance to Buy Bitcoin: A New Trend for Companies with Manageable Short-term Sell Pressures
As of now, a total of 228 listed companies globally hold approximately 820,000 Bitcoins. In addition to MicroStrategy and Tesla, numerous new startups focused on “buying Bitcoin as their main business” have emerged, utilizing debt issuance to finance their purchases. However, Coinbase also warns of two potential risks that could impact market sentiment:
- Forced Selling: If debts come due or refinancing is not possible, companies may be forced to sell Bitcoin to repay debts.
- Discretionary Selling: Even if only to manage cash flow, selling could trigger panic selling by other companies or in the market.
However, the following chart indicates:
“Companies like Strategy and MARA have convertible bonds mainly maturing in 2029–2030, totaling $4 billion, suggesting limited short-term maturity pressure and indicating that current market sell pressure risks remain manageable.”
U.S. Regulation Shifts from Enforcement to Institutionalization: Most Crypto ETF Applications Likely to Be Decided in October
The report indicates that U.S. regulation is shifting from “enforcement actions” to “proactive legislation” in the first half of 2025, bringing positive expectations to the market. Here are the developments of two major legislative proposals:
- Stablecoin Legislation, the “STABLE Act” and “GENIUS Act”: Entering the congressional coordination phase, covering reserves, compliance, and bankruptcy protection, with the fastest possible signing before Congress adjourns on 8/4.
- Market Structure Legislation (CLARITY Act): Clearly delineates the regulatory authorities of the SEC and CFTC, laying the groundwork for future digital asset market supervision.
Currently, there are approximately 80 crypto ETF applications, including spot ETFs for Bitcoin (BTC), Ethereum (ETH), SOL, and Ripple (XRP), as well as “physical in-and-out” and “staking” ETFs, all under SEC review. Some applications may announce results as early as July, while most applications may be delayed until October for a decision.
Strengthening Bitcoin Gains While Altcoins Focus on Fundamentals
Overall, Coinbase remains optimistic that the cryptocurrency market in 2025 will maintain a favorable outlook, benefiting from stable U.S. economic data, rising expectations of interest rate cuts, continued corporate Bitcoin holding trends, and increasingly clear regulatory frameworks, particularly favoring Bitcoin.
As for altcoins, their performance depends on various fundamentals and policy directions, with opportunities still existing in the market, albeit requiring cautious selection.
(Not every company can be MicroStrategy: A look at the risks of crypto reserve companies through Sharplink’s 70% drop.)
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and their prices may be subject to significant volatility, which could result in the loss of your entire principal. Please assess the risks carefully.