Coinbase In-depth Interpretation: How US regulatory loosening, rate cut expectations and corporate entry to reshape the future of encryption

Original title:Monthly Outlook: Three Themes for 2H25

Original author: David Duong, CFA - Global Head of Research

Original translation: forest, ChainCatcher

This article is compiled from Coinbase's latest monthly outlook research report. The report pointed out that the cryptocurrency market prospects in the second half of 2025 are optimistic, benefiting from the exceeding expectations of economic growth, accelerated entry of enterprises and improved regulatory environment . Although leveraged holding coins brings certain systemic risks, the short-term impact is limited; at the same time, stablecoin legislation and market structure reform are being accelerated.

The following content is the compilation and compilation of key points of the report.

Core point

We have a constructive view of the cryptocurrency market in the second half of 2025, mainly based on the following key factors: the prospect of US economic growth is becoming more optimistic, the Federal Reserve may cut interest rates, the corporate finance department's increased adoption of cryptocurrencies, and the increasingly clear U.S. regulatory policies. Although there are still potential risks, such as the potential steepering of the U.S. Treasury yield curve and the passive selling pressures that listed cryptocurrency investment vehicles may face, we believe these risks are controllable in the short term.

We believe that there are three key themes worth paying attention to in the current cryptocurrency market. First, the macroeconomic outlook is more optimistic than previous expectations. The threat of recession weakens and the U.S. economy shows signs of stronger growth. Although there is still a possibility of an economic slowdown, under current conditions, there is little chance that asset prices will fall sharply to 2024 levels. Second, despite the market being cautious about the systemic risks that may arise in the long term, the adoption of crypto assets by corporate finance departments is still becoming an important demand driver. Third, regulatory regulations on stablecoins and cryptocurrency market structures are advancing, which may have a profound impact on the cryptocurrency landscape in the United States.

Although the market still faces certain risks, we believe that the upward trend of Bitcoin is expected to continue. However, the performance of altcoins is more likely to be affected by their respective unique factors. For example, the U.S. Securities and Exchange Commission ( SEC ) is currently considering a number of cryptocurrency-related ETF applications, covering physical subscription and redemption mechanisms, inclusion of pledge functions, multi-asset fund allocation, and ETF products for a single altcoin . Relevant decisions are expected to be issued one after another by the end of 2025. These proposals and their final results may have a profound impact on the crypto market structure.

Prospects for the second half of 2025

We still have a constructive view on the market outlook for 2025 . A few months ago we proposed that the cryptocurrency market will bottom out in the first half of 2025 and hit an all-time high in the second half of the year. Although Bitcoin has rebounded in late May, we believe this judgment is still valid . In other words, from the trend point of view, cryptocurrencies still have room for further growth in the next 3 to 6 months. In our opinion, the macro-level disturbances caused by the imposition of tariffs have been basically digested. Looking ahead, as the US government gradually shifts to a more market-friendly policy orientation and is expected to promote the passage of new fiscal legislation before the end of the summer, the overall market risk appetite is expected to improve.

However, one of the main risks facing our view is that if the Government Spend bill is passed, it could lead to a steeper Treasury yield curve, especially in the 10- to 30 -year maturity range. In fact, due to market concerns about the continued expansion of the U.S. fiscal deficit, the 30 -year Treasury yield has climbed to 5.15% in May this year , the highest level in nearly two decades. This trend may lead to a tightening of the financial environment exceeding the market's original expectations, pushing up financing costs for enterprises and consumers, and thus weakening the momentum of economic growth, which is one of the key factors that support our optimistic expectations for the market. If long-term interest rates rise too quickly, we believe that it may cause fluctuations in the stock market and credit markets, especially when investors begin to question whether the United States has the ability to maintain a high deficit without causing serious consequences.

This situation will challenge the current mainstream " fiscal stimulus front " narrative and may prompt the market to reevaluate risky assets before long-term fiscal risks have yet to fully emerge, especially if economic data or Fed policies fail to meet market growth expectations. On the other hand, we believe this situation will enhance the prospects of store-of-value assets such as gold and Bitcoin, which in contrast, may decline in the attractiveness of altcoins, as Bitcoin will continue to benefit as the dominance of the dollar declines.

Overall, we believe that the trend of the cryptocurrency market in the second half of 2025 will revolve around the following three core themes :

• The macro prospects for the second half of 2025 are more optimistic than before, especially the expectations for US economic growth
• Cryptocurrency adoption by corporate finance departments is an important demand driver , but investors may be concerned about potential systemic risks
• The uncertainty of cryptocurrency regulation in the United States has eased, but what is the future regulatory path?

Topic One: The shadow of recession has gradually faded

Trade disturbances in early 2025 once caused market concerns that the U.S. economy might fall into a technical recession, especially when economic activity fell by 0.2% month-on-month in the first quarter of 2025 . (The headlines of media such as the Economist and the Wall Street Journal at that time included "Trump's trade war threatened a global recession" and "Trump's reciprocal tariffs may trigger a U.S. recession.") The so-called technical recession refers to negative growth in real GDP for two consecutive quarters.

However, at that time we still had a positive outlook for the second half of 2025 , because we believe (and still believe) the severity of the recession is the key. While a technical recession may weaken investor confidence, it may not necessarily turn into serious market disturbances unless negative trends in the macro economy worsen further. In fact, the most recent real recession occurred in 2008 (when U.S. stocks fell 53% ), while the recessions in 2015 and 2022 were relatively moderate (see Table 1 ). In addition, the recent forecast of the Atlanta Federal Reserve's GDPNow model has risen sharply, rapidly climbing from about 1.0% month-on - month growth rate in early May to 3.8% on June 5 (after seasonal adjustment), a change reflects a huge shift in existing economic data.

Therefore, we think the worst of this year may be a slowdown or a mild recession — if not abstaining from recession altogether — rather than a serious recession or stagflation. Against the backdrop of a slowdown, the market's shock may be relatively moderate, more reflected in some specific industries, rather than generally sharp declines in all asset classes. However, considering the rise in liquidity indicators such as the US M2 money supply and global central bank balance sheets, we judge that these conditions are unlikely to cause asset prices to fall back to 2024 levels, which means that Bitcoin’s uptrend may continue . In addition, the impact of tariffs may have reached its peak, and even if investors remain cautious before July 9 (the deadline for reciprocity for most countries, China will be on August 12 ), the market may gradually adapt and enter a new normal.

Topic 2: Enterprise crypto position expansion: Rise of the cloning legion

Currently, about 228 listed companies around the world hold a total of about 820,000 Bitcoins in their balance sheets. However, according to Galaxy Digital , only about 20 companies, as well as eight other companies that hold crypto assets such as Ethereum ( ETH ), Solana ( SOL ) and Ripple ( XRP ), adopt a leveraged financing model pioneered by Strategy (formerly MicroStrategy ). In our opinion, many of these companies have emerged in recent months, and the main driving force behind this is that the new cryptocurrency accounting standards will finally take effect on December 15 , 2024 . Prior to this, the U.S. Financial Accounting Standards Board ( FASB ) only allowed companies to include crypto assets as intangible assets in impairment losses in accordance with U.S. General Accounting Standards ( GAAP ). But since December 2023 , FASB updated its regulations to allow companies to disclose their digital assets at fair market value.

Simply put, the previous FASB guidelines largely hindered many companies from adopting cryptocurrencies, because the old rules only allowed companies to record losses in crypto assets , and the profitable part could not be recorded before the assets were sold, resulting in the potential gains not being reflected. The new FASB guide not only improves the accuracy of financial statements by more clearly reflecting the financial status of crypto assets, but also greatly simplifies the accounting processing process that has previously felt tricky for many CFOs and auditors.

While this explains why more companies have published their holdings of crypto assets on their balance sheets this year, an increasingly obvious trend is that more and more listed companies are taking " crypto asset accumulation " as their core business. In other words, early adopters like Strategy and Tesla initially included Bitcoin as an investment tool in asset allocation based on their main business. In contrast, these emerging companies have been focusing on accumulating Bitcoin or other crypto assets since their inception. They raise funds by issuing stocks and debts (usually convertible bonds) to acquire crypto assets, and many companies trade in the market at higher prices than their net assets.

The rise of such listed companies ( PTCVs ) with cryptocurrencies as their core assets has an important impact on the market, which may not only drive the growth of demand for crypto assets, but also pose systemic risks to the crypto ecosystem. In our opinion, systemic risks mainly include two aspects: ( 1 ) pressure to be forced to sell, and ( 2 ) active selling at the right time.

Forced to sell pressure. The risk of forced sell-off stems from the fact that many PTCVs have issued convertible bonds to raise low-cost funds for purchasing various crypto assets. This structure gives bondholders the opportunity to make a profit when the company's share price rises, which are often associated with the appreciation of their holdings of crypto assets. If the situation is not as expected, the company needs to repay the debt and investors can at least get back their principal. To repay debt, these PTCVs may be forced to sell their crypto assets and may face losses unless they can successfully raise funds again. Therefore, the market is concerned that when multiple PTCVs are facing pressure to repay debt at the same time, concentrated and irrational selling may occur, triggering market liquidation, and thus triggering widespread declines in the entire crypto market.

Take the initiative to sell at the right time. The second risk is more concealed, that is, this structure may weaken investors' confidence in the crypto ecosystem. For example, if one or more of the PTCVs suddenly sell some of their crypto assets, even if it is just for conventional cash flow management or operational needs, it may trigger market concerns about price declines, resulting in sudden price declines and market liquidation. In other words, once prices start to fall and these companies believe that the exit channel is narrowing, other holders may follow suit and sell, causing market instability before the actual debt repayment problem has emerged.

But overall, we believe that the downward pressure brought by the above two risks is difficult to reproduce the serious consequences caused by some failed crypto projects in the past. First, based on our inventory of outstanding debts from nine related companies, most of the debts will not expire from the end of 2029 to the beginning of 2030 , which means that the pressure of forced selling in the short term is not prominent. (The first major maturity debt is Strategy 's $ 3 billion convertible bond, which will expire in December 2029 and can be redeemed in advance in December 2026. See Figure 3 for details .) In addition, as long as the loan-to-value ratio ( LTV ) remains within a reasonable range, we believe that larger companies are likely to be able to obtain refinancing channels, so that they can cope with potential pressure without liquidating their reserve assets.

Of course, as debts gradually mature or more companies adopt similar strategies, our assessments may also change depending on the overall risk preference level and the length of repayment period. In fact, there is no unified standard for financing methods for each PTCV , which also makes tracking of its capital structure relatively complicated. But it is obvious that Strategy 's leading attempts have attracted other executives interested in crypto assets, who may further study whether such investment strategies are suitable for the company. Overall, the market has not yet reached a saturation state, and the trend of corporate crypto assets accumulation is still expected to continue to develop in the second half of 2025 .

Topic 3: Opening a new regulatory path

In the first half of 2025 , the US regulatory landscape underwent an unprecedented major change, laying the foundation for digital asset policy to enter the most transformative stage so far. This change is very different from the previous administration’s “ replace supervision with law enforcement ” model. We believe that the second half of 2025 is expected to redefine the United States as a global crypto asset center, a trend that is driven by the White House’s decisive policy shift to supporting the crypto industry and the urgent efforts of Congress to actively promote the establishment of a comprehensive regulatory framework for digital assets.

We believe that with the strong support of both parties, stablecoin legislation is most likely to become the first important crypto-related bill to be passed by the United States. Both houses of Congress have shown a positive trend in this regard. The House of Representatives is advancing the STABLE Act and the Senate is advancing the GENIUS Act. The two complement each other in terms of content. The Senate may pass the GENIUS Act in its entirety as soon as next week , which will then be handed over to the House of Representatives for consideration. Both bills set reserve requirements and anti-money laundering compliance standards for stablecoin issuers, and also provide relevant provisions for coin holders of consumer protection and bankruptcy priority repayment.

The two main differences between the two bills focus on the regulation of non-U.S. stablecoins issuers and the threshold for scale application of federal regulation. Congressional negotiators will coordinate these differences in the coming months. Administration officials have expressed confidence that the unified bill will be submitted to President Trump for signature before Congress adjourns on August 4 , 2025 . This may become an important step in promoting the implementation of the crypto market structure bill.

The Crypto Market Structure Act may be one of the most long-term progress this year, especially after the U.S. House Financial Services Committee introduced the Digital Asset Market Clear Act of 2025 ( CLARITY Act) on May 29 . The bill aims to clarify the division of responsibilities between the Commodity Futures Trading Commission ( CFTC ) and the Securities and Exchange Commission ( SEC ) in digital asset supervision, based on the specific basis of dividing relevant assets into " digital commodities " or " investment contract assets " .

The bill is further developed based on the Financial Innovation and Technology Act for the 21st Century ( FIT21 ) passed by the House of Representatives last year , but there are some key differences. Most importantly, the current draft legislation requires the Commodity Futures Trading Commission ( CFTC ) and the Securities and Exchange Commission ( SEC ) to jointly define core terms such as " digital commodities " and to fill regulatory gaps through subsequent rulemaking, which means that the specific boundaries of regulatory authority may continue to evolve. While we believe the bill is intended to lay the foundation for future negotiations between the two houses, it is important to note that negotiations around the market structure may be much more complex than negotiations related to stablecoins.

ETF approval timetable. In addition, the US Securities and Exchange Commission ( SEC ) is facing a complex environment for cryptocurrency ETF application in 2025. There are currently about 80 proposals pending review, covering physical subscription / redemption mechanisms, pledge functions, index funds and single-name altcoin ETFs :

• Several ETF issuers (such as Bitwise , Franklin Templeton , Grayscale , Hashdex ) have submitted applications for multi-asset funds, intending to track a wide range of cryptocurrency indexes. Many of these funds have a weight of up to 90% on BTC and ETH , and the SEC already has a regulatory framework for crypto-index ETFs , so a decision may be made as early as July 2 .
• The proposal on the physical subscription / redemption mechanism is currently in the official review stage of the SEC . The introduction of this mechanism not only helps align the ETF market price with net value ( NAV ), but also may narrow the bid-ask spread of ETF share. We believe that the SEC may make a decision by July 2025 , but it does not rule out the extension until October 2025 .
• The SEC must make a ruling 10 months before the ETF proposals to include the staking function . It is reported that there are still questions within the SEC as to whether certain fund structures meet the definition of " investment company " . However, Bloomberg Intelligence believes that the SEC may be forced to take action in advance given the custom basket terms and transparency standards in the 6c-11 rule.
• Finally, there are several single-name altcoin ETF applications, most of which have a statutory review deadline of October . We expect the SEC to spend enough review time to process these proposals.

in conclusion

We are constructive about the outlook for the crypto market in the third quarter of 2025, mainly supported by factors such as relatively optimistic outlook for U.S. economic growth, Fed rate cuts, increased corporate adoption of crypto assets, and increased transparency in U.S. regulatory policies . While risks such as the possible steepening of the yield curve and the potential passive selling pressure from listed crypto asset companies still exist, we believe these are controllable in the short term. That being said, while we remain confident in the upward trend of Bitcoin, we believe that only a few altcoins with specific positive factors are expected to perform well.