Coinbase releases 2025 crypto market outlook, focusing on five areas including stablecoins, RWA tokenization, and DeFi

Odaily reported that Coinbase recently released a crypto market outlook, highlighting five areas to watch in 2025: 1. Stablecoins are just getting started - Stablecoins have become a killer application in crypto. As of December 1, 2024, the stablecoin market cap grew 48% to a record high of $193 billion, and some analysts predict this figure could grow to $30 trillion in the next five years. Stablecoin trading volume has exceeded $27 trillion so far this year, up about 3 times year-over-year. As stablecoins continue to soar, we will soon see their first and primary use case being global capital flows and commerce, not trading; 2. RWA tokenization is poised for significant growth - According to rwa.xyz, as of December 1, tokenized RWA grew over 60% to $13.5 billion (excluding stablecoins), with tokenization continuing to make major strides in 2024. Companies are experimenting with using tokenized assets as collateral for other financial transactions involving derivatives, which can simplify operations and reduce risk. The RWA trend is also outpacing traditional assets like US Treasuries and money market funds, gaining traction in private credit, commodities, corporate bonds, real estate, and insurance. We believe the cumulative effect of continued investment and technological improvements should lay the foundation for tokenization to become a cornerstone of the current crypto market cycle by 2025; 3. Crypto ETFs have permanently altered the supply and demand dynamics of crypto - After the record-breaking success of the US spot Bitcoin ETF, the entire crypto market has changed. Nearly every type of institutional investor, including endowments, pensions, hedge funds, RIAs, and family offices, now owns crypto ETFs. As institutional adoption continues to rise, we believe these holders will provide a long-term, stable source of demand for the asset class. Looking ahead, the industry is focused on the SEC potentially approving spot ETFs for tokens like , , , and , but we think meaningful near-term institutional demand may be limited to a small subset of assets. We're more interested in what happens if the SEC removes the authorization for ETFs to create and redeem shares in cash rather than physical, or allows these products to incorporate staking. These changes could improve the potential returns for ETF holders, making ETFs more attractive to investors; 4. A DeFi renaissance will usher in a new era - DeFi suffered some blows in the last cycle, but a more sustainable and resilient ecosystem has emerged. Lending protocol TVL has hit new highs, while DEX trading volume share (relative to CEXes) has reached peaks. Additionally, a shift in the US regulatory landscape and the adoption of on-chain verification may help pave a clearer path for traditional institutional investors to participate in DeFi. All of this suggests DeFi may significantly expand its influence in the not-too-distant future; 5. Regulation will ultimately shift from headwind to tailwind - For years, the US has suffered from unclear, inconsistent regulation, but the tide has now turned, and the US Congress is poised to be the most crypto-friendly in history. Both the House and Senate have bipartisan support for crypto, meaning US regulation will provide a tailwind for crypto performance in 2025. Crypto becoming an election issue underscores the urgency for policymakers to stay in sync with the evolving demands of this influential voting bloc, and we see a high likelihood of achieving new legislative milestones. Specifically, we expect the US to establish a comprehensive regulatory framework, enact robust stablecoin legislation, and end the enforcement-focused regulatory era. The US is not the only jurisdiction poised to make regulatory progress. Many G20 countries and major financial centers are also crafting rules to accommodate digital assets, which should help create a more innovation and growth-friendly environment. Collectively, these initiatives can open the doors for more individuals and institutions to participate in the crypto economy with confidence. As the regulatory and technological landscape evolves, the crypto ecosystem is expected to grow significantly, as broader adoption will drive the industry closer to realizing its full potential. The breakthroughs and advancements in 2025 are likely to determine the long-term trajectory of the crypto industry for decades to come. It will be a pivotal year.