The outlook for the crypto market in the second half of 2025 remains constructive, according to Coinbase Institutional, which highlights a mix of macroeconomic trends, improving regulatory clarity, and increasing corporate involvement as key tailwinds.
The firm’s report, authored by David Duong, Global Head of Research at Coinbase Institutional, outlines conditions favorable for further growth across the digital asset space, including a potential new all-time high for Bitcoin.
Factors such as anticipated Federal Reserve rate cuts, stabilizing economic indicators, and bipartisan legislative momentum around crypto policy contribute to the firm’s optimistic stance.
Still, Coinbase’s research acknowledges risks, particularly the rise of corporate entities using debt to accumulate digital assets. These leveraged strategies, while accelerating adoption, may also introduce structural vulnerabilities if liquidity conditions tighten or investor sentiment shifts.
With companies now able to report crypto at fair market value following rule changes from the Financial Accounting Standards Board in late 2024, balance sheets holding BTC and other digital assets are becoming more common. However, the use of convertible debt to fund such strategies presents concerns around potential selling pressure during periods of market stress.
Leveraged Corporate Strategies Raise Concerns About Market Stability
As of mid-2025, approximately 228 publicly traded firms collectively hold more than 820,000 BTC, according to data cited by Coinbase. Around 20 of those firms, and several others with exposure to Ethereum, Solana, and XRP, are pursuing leveraged acquisition strategies inspired by companies like Strategy (formerly MicroStrategy).
Duong notes that while these approaches have not yet created immediate instability, the lack of standardized funding models could become problematic over time.
If market conditions deteriorate or debt maturities approach, companies might be forced to sell large portions of their crypto reserves to meet obligations, potentially amplifying volatility.
Coinbase estimates that most of the outstanding debt from these firms won’t mature until 2029 or later, which may help mitigate short-term risk. Additionally, if loan-to-value ratios remain moderate, the companies involved may still have access to refinancing or liquidity management options that reduce the likelihood of urgent asset liquidations.
However, Duong cautions that systemic vulnerabilities remain difficult to track, and broader corporate interest in this model continues to grow, leaving open questions about how resilient these strategies will be under future market pressure.
Regulatory Developments and Broader Outlook
The US regulatory environment is also evolving, with pending legislation such as the GENIUS, STABLE, and CLARITY Acts potentially reshaping the crypto market by August.
These bills aim to clarify oversight roles between the SEC and CFTC, define stablecoin standards, and provide guardrails for institutional and retail engagement.
Meanwhile, the SEC is reviewing roughly 80 crypto ETF applications, ranging from staking-enabled products to single-asset altcoin funds, with decisions expected between July and October.
Coinbase concludes that while risks are present, especially from leveraged players, the long-term trajectory for Bitcoin remains upward. The firm expects broader macro trends, institutional adoption, and regulatory progress to support continued expansion through the end of 2025, with select altcoins also positioned to benefit based on project-specific fundamentals.
Featured image created with DALL-E, Chart from TradingView
