2025 Crypto Market Outlook, by Coinbase

As we look forward into 2025, the cryptocurrency market is poised for transformative growth.

The maturation of the asset class continues to gain momentum, with increasing institutional adoption and expanding use cases across its various sectors. In just the past year, spot ETFs were approved in the US, tokenization of financial products increased dramatically, and stablecoins saw massive growth and greater integration into the global payments framework.

Getting here has been no easy task. But while it’d be easy to think of these successes as the culmination of years of work, increasingly it looks like they’re actually just the beginning of something much bigger.

Crypto’s strides are all the more impressive when we consider that, only a year ago, the asset class was reeling from interest rate hikes, regulatory crackdowns, and an uncertain path forward. It’s a testament to crypto’s resilience that despite all of those challenges, it has become a firmly established alternative asset class with real staying power.

From a markets perspective though, the uptrend in 2024 does belie some stark differences with previous bull cycles. Some of them are cosmetic: the term “web3” was replaced with the more fitting “onchain.” Others are more profound: a demand for fundamentals has started to replace the waning influence of narrative-driven investment strategies, partly due to wider institutional participation.

Moreover, not only did bitcoin dominance surge, but the innovations in decentralized finance pushed the boundaries of what’s possible with blockchain – putting the foundations of a new financial ecosystem within reach. Central banks and major financial institutions around the world are discussing how crypto can potentially make things like asset-issuance, trading, and record-keeping more efficient.

Going forward, the current crypto landscape presents a multitude of promising developments. At the bleeding edge of disruption, we’re looking at decentralized peer-to-peer exchanges, decentralized prediction markets, and artificial intelligence (AI) agents equipped with crypto wallets. Closer to the institutional front, we see significant potential in stablecoins and payments (bringing crypto and fiat banking solutions closer together), undercollateralized onchain lending (facilitated by onchain credit scores), and compliant onchain capital formation.

Author

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