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

Coinbase recently released a cryptocurrency market outlook, highlighting five areas worth paying attention to in 2025: 1. Stablecoins are just getting started Stablecoins have become a killer application for cryptocurrencies. As of December 1, 2024, the market value of stablecoins increased by 48% to an all-time high of $193 billion, and some analysts predict that this figure may grow to $3 trillion in the next five years. Stablecoin trading volume has exceeded $27 trillion so far this year, an increase of about 3 times year-on-year. As stablecoins continue to soar, we will soon see that their first and main use case will be global capital flows and commerce, rather than transactions; 2. RWA tokenization is expected to achieve substantial growth According to rwa.xyz, as of December 1, tokenized RWA grew by more than 60% to $13.5 billion (excluding stablecoins), and tokenization continued to make significant progress in 2024. Companies are trying to use tokenized assets as collateral for other financial transactions (such as those involving derivatives), which can simplify operations and reduce risks. In addition, the RWA trend is moving beyond assets such as U.S. Treasuries and money market funds, and is also gaining traction in private credit, commodities, corporate bonds, real estate, and insurance. We believe that the cumulative effect of continued investment and technological improvements in 2025 should lay the foundation for tokenization to become the cornerstone of the current crypto market cycle. Ultimately, we believe that tokenization can simplify the entire portfolio construction and investment process by bringing it on-chain, although this may take several years; 3. Crypto ETFs have forever changed the supply and demand dynamics of cryptocurrencies After the record success of the U.S. spot Bitcoin ETF, the entire cryptocurrency market has changed. Almost every type of institutional investor (including endowments, pension funds, hedge funds, investment advisors, and family offices) now owns a cryptocurrency ETF. As institutional adoption continues to increase, we believe these holders will provide a long-term and stable source of demand for this asset class. Looking ahead, the industry is focused on the potential approval of spot ETFs for tokens such as XRP, SOL, LTC, and HBAR in the United States, but we believe that meaningful institutional demand in the short term may be limited to a small number of assets. We are more interested in what would happen if the SEC canceled the authorization to create and redeem ETF shares for cash rather than physical assets or allowed these products to include pledges. These changes could increase the potential returns for ETF holders, making ETFs more attractive to investors; 4. The DeFi revival will drive it into a new era DeFi suffered some shocks in the last cycle, but a more sustainable and resilient ecosystem has emerged. Lending protocol TVL hit an all-time high, while DEX trading volume share (relative to CEX) reached a high point. In addition, the shift in the US regulatory landscape and the adoption of on-chain verification may help provide a clear path for traditional institutional investors to participate in DeFi. All of this suggests that DeFi may expand its influence in the near future; 5. Regulation will eventually turn from headwind to tailwind For many years, the United States has suffered from unclear and inconsistent regulation, but now the situation has reversed, and the US Congress will soon usher in the most cryptocurrency-friendly Congress in history. Both the House of Representatives and the Senate support cryptocurrencies, which means that US regulation will provide a boost to cryptocurrency performance in 2025. Cryptocurrency’s emergence as an election issue highlights the urgency with which policymakers must align with the evolving needs of this influential voting bloc, and we see a strong likelihood of achieving new legislative milestones. Specifically, we expect the U.S. to establish a comprehensive regulatory framework, introduce robust stablecoin legislation, and end the era of enforcement regulation. The U.S. is not the only jurisdiction poised to make regulatory progress. Many G20 countries and major financial centers are developing rules to accommodate digital assets, which will help create an environment more conducive to innovation and growth. Taken together, these moves can open the door for more people and institutions to confidently participate in the crypto economy. As the regulatory and technological landscape evolves, the crypto ecosystem is expected to grow significantly as broader adoption drives the industry closer to realizing its full potential. Breakthroughs and advances in 2025 are likely to determine the long-term trajectory of the crypto industry over the next few decades. This will be a critical year.