US-based crypto exchange Coinbase says there will be five main trends to watch in the digital asset markets next year.
In a new “Crypto Market Outlook” report, Coinbase starts its list with stablecoins, saying that they’re “just getting started” after the sector’s explosive growth in 2024.
Coinbase says stablecoins are crypto’s “killer app” and their use case will soon expand beyond simple trading.
“As stablecoins continue their surge, we are rapidly approaching the day when their first and primary use cases will be global capital flows and commerce, rather than trading.”
Next on the list is the tokenization of real-world assets (RWAs), which Coinbase says will emerge as a cornerstone of the current crypto market cycle in 2025.
“Firms are experimenting with using tokenized assets as collateral for other financial transactions, like those involving derivatives, which could streamline operations and mitigate risk. Moreover, the RWA trend is expanding beyond assets like US Treasuries and money market funds – finding traction with private credit, commodities, corporate bonds, real estate, and insurance as well.”
The third area to watch, according to Coinbase, is the exchange-traded fund (ETF) space.
Coinbase says it expects institutional interest to remain concentrated within a select few crypto ETFs. The crypto exchange is also interested in potential rule changes that regulators could make, like allowing ETF products to incorporate staking or in-kind redemptions.
Next up is decentralized finance (DeFi). Coinbase says DeFi will witness a “resurgence” that will propel it into a new era and extend its reach.
“Decentralized finance (DeFi) took some hits in the previous cycle, but a more sustainable and resilient ecosystem has emerged. Lending protocols are hitting all-time highs in total value locked (TVL), while decentralized exchanges (DEXs) are pushing their share of trading volumes – relative to centralized exchanges (CEXs) – to unprecedented levels.”
The fifth area in crypto markets Coinbase says to watch is the regulatory climate, which the exchange says is due for a major shift that boosts the industry. Coinbase says that a pro-crypto majority in both the House and Senate will be a tailwind for crypto in 2025.
“Specifically, we expect to see the establishment of a comprehensive regulatory framework in the US, the introduction of sound stablecoin legislation, and an end to the era of regulation by enforcement.
And the US isn’t the only jurisdiction poised to make regulatory progress. Many G20 countries and major financial hubs are writing rules to accommodate digital assets, which should help create more conducive environments for innovation and growth. Taken together, these moves can open the door for more people and institutions to confidently participate in the crypto economy.”
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