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 the latest monthly outlook research report released by Coinbase. The report indicates that the cryptocurrency market outlook for the second half of 2025 is optimistic, benefiting from better-than-expected economic growth, accelerated corporate entry, and improved regulatory environment. Although leveraged holdings bring certain systemic risks, the short-term impact is limited; meanwhile, stablecoin legislation and market structure reforms are being accelerated.
The following is a compilation and translation of the report's key points.
Core Insights
We have a constructive view of the cryptocurrency market in the second half of 2025, primarily based on the following key factors: optimistic US economic growth prospects, potential Fed rate cuts, increased cryptocurrency adoption by corporate finance departments, and increasingly clear US regulatory policies. Although we still face some potential risks, such as possible further steepening of the US Treasury yield curve and potential passive selling pressure on listed cryptocurrency investment tools, we believe these risks are controllable in the short term.
We believe there are three key themes in the current cryptocurrency market worth noting. First, the macroeconomic outlook is more optimistic than previously expected. The threat of recession has diminished, and the US economy shows stronger growth signs. Although the possibility of economic slowdown still exists, under current conditions, a significant asset price drop to 2024 levels is unlikely. Second, despite market caution about potential medium to long-term systemic risks, corporate finance departments' adoption of crypto assets is becoming an important demand driver. Third, regulatory regulations on stablecoins and cryptocurrency market structure are advancing, which could have far-reaching impacts on the US cryptocurrency landscape.
Despite ongoing market risks, we believe Bitcoin's upward trend is likely to continue. However, Altcoins' performance will more likely be influenced by their individual specific factors. For instance, the SEC is currently reviewing multiple cryptocurrency-related ETF applications, covering physical subscription and redemption mechanisms, inclusion of staking functions, multi-asset fund allocations, and single Altcoin ETF products. These proposals and their final results are expected to be gradually released before the end of 2025 and could profoundly impact the crypto market landscape.
Positive Outlook for the Second Half of 2025
(Translation continues in the same manner, maintaining the specified translations for cryptocurrency-related terms)Therefore, we believe that the worst-case scenario this year might be an economic slowdown or mild recession—if not completely avoiding a recession—rather than falling into a severe recession or stagflation. In the context of an economic slowdown, market impacts may be relatively mild, primarily affecting specific industries rather than a widespread decline across all asset classes.However, considering the rise of liquidity indicators such as the U.S. 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 thatBTC's upward trend may continue. Additionally, the impact of tariffs may have reached its peak, and even if investors remain cautious before July 9 (the deadline for most countries' temporary tariff suspension, with China's being August 12), the market may gradually adapt and enter a new normal.
Theme Two: Corporate Crypto Holdings Expansion: Clone Legion Rises
Currently, approximately 228 listed companies hold a total of around 820,000 BTC on their balance sheets. However, according to Galaxy Digital, only about 20 companies, plus another 8 companies holding crypto assets such as ETH, Solana (SOL), and XRP, have adopted the leveraged financing model pioneered by Strategy (formerly MicroStrategy). In our view, many such companies have emerged in recent months, primarily driven by the new crypto accounting guidelines that will officially take effect on December 15, 2024. Previously, the Financial Accounting Standards Board (FASB) only allowed companies to record crypto assets as intangible assets subject to impairment losses under U.S. Generally Accepted Accounting Principles (GAAP). However, FASB updated its regulations in December 2023, allowing 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 crypto asset losses, with potential gains unable to be recorded before the asset was sold, thus preventing potential profits from being reflected. The new FASB guidelines, by more clearly reflecting the financial status of crypto assets, not only improve the accuracy of financial statements but also significantly simplify the accounting process that previously troubled many CFOs and auditors.
While this explains why more companies have disclosed crypto asset holdings on their balance sheets this year, an increasingly apparent trend is that more listed companies are treating "crypto asset accumulation" as their core business. In other words, early adopters like Strategy and Tesla initially incorporated Bitcoin as an investment tool within their primary business. In contrast, these emerging companies have set accumulating BTC or other crypto assets as their primary goal from the outset. They finance themselves by issuing stocks and debt (usually convertible bonds) to acquire crypto assets, and many companies trade at prices higher than their net assets.
The rise of Public Trading Crypto Vehicle (PTCV) companies has significant market implications, potentially driving crypto asset demand growth while also introducing systemic risks to the crypto ecosystem. In our view, systemic risks primarily include two aspects: (1) forced selling pressure and (2) opportunistic selling.
Forced Selling Pressure. The risk of forced selling stems from many PTCVs issuing convertible bonds to raise low-cost funds for purchasing various crypto assets. This structure allows bondholders to profit when the company's stock price rises, which often correlates with the appreciation of their held crypto assets. If circumstances are not as expected, the company must repay the debt, with investors at least recovering their principal. To repay debt, these PTCVs might be forced to sell their crypto assets unless they can successfully refinance, potentially facing losses. Therefore, the market fears that when multiple PTCVs simultaneously face debt repayment pressure, concentrated and irrational selling could trigger market liquidation and widespread crypto market decline.
Opportunistic Selling. The second risk is more subtle: this structure might undermine investor confidence in the crypto ecosystem. For example, if one or more PTCVs suddenly sell part of their crypto assets, even just for routine cash flow management or operational needs, it could trigger market fears of price drops, leading to sudden price declines and market liquidation. In other words, once prices start falling, these companies might perceive their exit window is narrowing, potentially causing other holders to follow suit and destabilize the market before actual debt repayment issues emerge.
However, overall, we believe the downward pressure from these two risks is unlikely to reproduce the severe consequences of some past failed crypto projects. First, based on our review of debt for nine related companies, most debt will not mature until late 2029 to early 2030, meaning short-term forced selling pressure is not prominent. (The first major maturity is Strategy's $3 billion convertible bond, due in December 2029, with an option for early redemption in December 2026.) Additionally, as long as the loan-to-value (LTV) ratio remains reasonable, we believe larger companies are likely to obtain refinancing channels, allowing them to handle potential pressure without liquidating their reserve assets.
Of course, our assessment may change as debt gradually matures or more companies adopt similar strategies, depending on overall risk appetite and repayment timeline. In fact, there is no unified standard among PTCVs in financing methods, making tracking their capital structure relatively complex. However, it is evident that Strategy's pioneering attempt has attracted other corporate executives interested in crypto assets, who may further investigate whether such investment strategies suit their companies. Overall, the market has not yet reached saturation, and the trend of corporate crypto asset accumulation is expected to continue developing in the second half of 2025.
Theme Three: Launching a New Regulatory Path
In the first half of 2025, the US regulatory landscape underwent an unprecedented major transformation, laying the foundation for the most transformative phase of digital asset policy to date. This change is drastically different from the previous government's "enforcement instead of regulation" approach. We believe that the second half of 2025 is likely to redefine the United States' status as a global crypto asset center, thanks to the White House's decisive policy shift to support the crypto industry and Congress's urgent efforts to establish a comprehensive digital asset regulatory framework.
We believe that stablecoin legislation is most likely to become the first significant crypto-related bill passed in the United States, with strong bipartisan support. Both congressional chambers have shown a positive attitude, with the House advancing the STABLE Act and the Senate pushing the GENIUS Act, which complement each other. The Senate may pass the GENIUS Act as early as next week, which will then be reviewed by the House. Both bills set reserve requirements and anti-money laundering compliance standards for stablecoin issuers, and provide consumer protections and bankruptcy priority payment clauses for token holders.
The two main differences between these bills focus on the regulatory approach for non-US stablecoin issuers and the scale threshold for federal regulation. Congressional negotiators will coordinate these differences in the coming months. Government officials have expressed confidence in submitting a unified bill to President Trump for signature before Congress adjourns on August 4, 2025. This could be an important step in implementing the crypto market structure bill.
The crypto market structure bill may become one of the most significant long-term developments this year, especially after the House Financial Services Committee proposed the 2025 Digital Asset Market Clarity Act on May 29. The bill aims to clarify the responsibilities of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in digital asset regulation, specifically by categorizing assets as "digital commodities" or "investment contract assets".
The bill is further developed based on last year's Financial Innovation and Technology for the 21st Century Act (FIT21), but with some key differences. Most importantly, the current legislative draft requires the CFTC and SEC to jointly define core terms like "digital commodities" and fill regulatory gaps through subsequent rule-making, meaning the specific boundaries of regulatory authority may continue to evolve. While we believe the bill is intended to lay the groundwork for future inter-chamber negotiations, the market structure discussions may be far more complex compared to stablecoin negotiations.
ETF Approval Timeline. The SEC faces a complex crypto ETF application environment in 2025, with approximately 80 proposals pending, covering physical creation/redemption mechanisms, staking features, index funds, and single-name Altcoin ETFs:
- Multiple ETF issuers (such as Bitwise, Franklin Templeton, Grayscale, Hashdex) have submitted multi-asset fund applications tracking broad crypto indices. Many of these funds have BTC and ETH weightings up to 90%, and the SEC already has a regulatory framework for crypto index ETFs, so a decision could potentially be made as early as July 2.
- Proposals regarding physical creation/redemption mechanisms are currently under formal SEC review. Introducing this mechanism would help align ETF market prices with net asset value (NAV) and potentially narrow the bid-ask spread. We believe the SEC may decide by July 2025, but a delay until October 2025 is not excluded.
- For ETF proposals including staking features, the SEC must rule before October. Reportedly, internal SEC discussions question whether certain fund structures meet the "investment company" definition. However, Bloomberg Intelligence believes the SEC may be forced to act earlier due to custom basket and transparency standards in Rule 6c-11.
- Finally, several single-name Altcoin ETF applications exist, with most having a legal review deadline in October. We anticipate the SEC will use the full review time to process these proposals.
Conclusion
We have a constructive outlook on the crypto market in Q3 2025, supported by factors including optimistic US economic growth prospects, Fed rate cuts, increased corporate crypto asset adoption, and increased regulatory policy transparency. While risks such as potential yield curve steepening and passive selling pressure from listed crypto asset companies exist, we consider these controllable in the short term. That said, while we remain confident in Bitcoin's upward trend, we believe only a few Altcoins with specific favorable factors are likely to perform well.
