Author: Coinbase
Compiled by: Blockchain in Plain Language
Monthly Outlook for the Second Half of 2025 - Three Major Themes on June 12, 2024
● Crypto Market Outlook for the Second Half of 2025 is Positive, driven by better-than-expected economic growth, enterprise crypto asset adoption, and regulatory clarity.
● Enterprise leveraged financing for purchasing crypto assets may bring systemic risks, such as forced or voluntary selling pressure, but we believe this is not a significant issue in the short term.
● Changes in the US regulatory environment are favorable to the crypto market, with progress in stablecoin legislation and ongoing discussions about crypto market structure bills.
Our optimistic outlook for the crypto market in the second half of 2025 is driven by several key factors: more optimistic expectations for US economic growth, potential Fed rate cuts, increased enterprise fund pool adoption of crypto assets, and progress in US regulatory clarity. Although there are some potential risks, such as steepening of the US Treasury yield curve and potential forced selling pressure on publicly traded crypto asset tools, we believe these risks are manageable in the short term.
We believe the three key themes for the crypto market in the second half of 2025 are as follows:
- Macroeconomic prospects better than expected. The shadow of economic recession is fading, and the US economy shows stronger growth signs. Although economic slowdown remains possible, asset prices are unlikely to fall back to 2024 levels.
- Enterprise fund pool adoption of crypto assets is an important source of demand, but there are medium to long-term concerns about potential systemic risks.
- Significant progress in the US regulatory environment, especially the advancement of stablecoin and crypto market structure legislation, could significantly shape the US crypto market landscape.
Despite risks, we expect Bitcoin's upward trend to continue, but the performance of other crypto assets (altcoins) may depend more on their specific factors. For example, the SEC is handling numerous ETF applications involving potential decisions on physical creation and redemption, staking inclusion, multi-asset funds, and single crypto asset ETFs, expected to be made before the end of 2025. These proposals and related decisions could influence market dynamics.
[Translation continues in the same manner for the entire text]Although this explains why more companies announced holding crypto assets this year, an emerging trend is publicly traded companies focusing on crypto asset accumulation. Unlike early adopters like Strategy and Tesla's investment approach, emerging entities primarily aim to accumulate BTC or other crypto assets, raising funds through equity and debt issuance (usually convertible bonds), and many trade at a premium above their net assets.
Chart 2: Number of BTC Wallets with Balances ≥ $1 Million Surges
Source: glassnode, Coinbase.
These Publicly Traded Crypto Asset Vehicles (PTCVs) have significant market impacts, bringing both potential demand and systemic risks. Systemic risks primarily include two aspects:
Forced Selling Pressure: Many PTCVs raise funds at low costs through convertible bonds to purchase crypto assets. If crypto assets appreciate, bondholders may profit; otherwise, companies need to repay debt and might be forced to sell crypto assets, leading to market liquidation and price drops.
Proactive Selling Pressure: If a company suddenly sells crypto assets due to cash flow management or other business needs, it could trigger price declines and market instability, causing other entities to compete in selling, further exacerbating market volatility.
Chart 3: Distribution of Outstanding Debt for Some Companies by Final Maturity Date
Source: SEC Files, CoinDesk, CoinTelegraph, Nasdaq, Press Releases, Coinbase
However, we believe these risks are unlikely to reproduce the downward pressure of past failed crypto projects. First, based on our list of outstanding debt for nine entities, most debt will mature between late 2029 and early 2030, with minimal short-term forced selling pressure. For example, Strategy's $3 billion convertible bond will mature in December 2029, with an optional early redemption date in December 2026. As long as the loan-to-value (LTV) ratio remains reasonable, large enterprises may avoid liquidating their reserve assets through refinancing.
Of course, risks may increase as debt matures or more companies adopt similar strategies. Due to the inconsistent fundraising methods of PTCVs, tracking their capital structure is challenging. Strategy's pioneering efforts have attracted attention from other corporate executives, and the trend of corporate crypto asset accumulation is expected to continue in the second half of 2025.
Theme 3: Paving New Regulatory Paths
In the first half of 2025, the U.S. regulatory environment underwent an unprecedented change, laying the groundwork for the most transformative digital asset policy period. This stands in stark contrast to the previous government's "regulation through enforcement". We believe the second half of 2025 will redefine the U.S. status as a global crypto center, supported by the White House's decisive shift towards crypto-friendly policies and urgent efforts by Congress to establish a comprehensive framework.
Stablecoin Legislation is likely to be the first major crypto-related legislation passed in the U.S., receiving strong bipartisan support. Both the House (STABLE Act) and Senate (GENIUS Act) are advancing related bills, with the Senate potentially approving the GENIUS Act as early as next week and sending it to the House for review. Both bills set reserve requirements, anti-money laundering compliance parameters, and consumer protection and bankruptcy priority clauses for stablecoin issuers. The bills differ in handling non-U.S. stablecoin issuers and federal regulatory transition scale thresholds, which need to be resolved in the coming months. Government officials express confidence in reaching a unified bill and submitting it to President Trump for signature before Congress's August 4th recess. This could be a precursor to passing market structure legislation for crypto.
Crypto Market Structure Act may be the most important long-term development this year. On May 29th, the House Financial Services Committee introduced a bipartisan-supported Digital Asset Market Clarity Act of 2025 (CLARITY Act), which delineates regulatory responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) based on whether assets are "digital commodities" or "investment contract assets". The bill is based on last year's Financial Innovation and Technology for the 21st Century Act (FIT21) but requires the CFTC and SEC to jointly define key terms, with regulatory boundaries potentially continuing to evolve.
ETF Approval Timeline: SEC to process about 80 crypto ETF applications in 2025, involving physical creation/redemption, staking capabilities, index funds, and single crypto asset ETFs:
- Multi-Asset Funds: Funds from Bitwise, Franklin Templeton, Grayscale, Hashdex, etc., may track broad crypto indices, with SEC potentially deciding by July 2nd.
- Physical Creation/Redemption: Currently under official SEC review, possible decision in July or October 2025.
- Staking Inclusion Proposals: SEC needs to decide before October, with some fund structures' "investment company" status still in question.
- Single Crypto Asset ETFs: Multiple applications have a final legal deadline in October, with SEC potentially needing full review time.
Conclusion
We remain optimistic about the crypto market outlook for Q3 2025, supported by U.S. economic growth prospects, Fed rate cuts, increased corporate crypto asset adoption, and progress in U.S. regulatory clarity. Despite risks of yield curve steepening and forced selling pressure from publicly traded crypto vehicles, these risks are manageable in the short term. While we are confident in Bitcoin's upward trajectory, only some other crypto assets may perform well due to their unique circumstances.
Article Link: https://www.hellobtc.com/kp/du/06/5893.html
Source: https://coinbase.bynder.com/m/b354a5425ddacab/original/Monthly-Outlook-June-2025.pdf
