The digital asset markets are constantly evolving, and US-based crypto exchange Coinbase has identified five key trends to watch in the coming year. In their “Crypto Market Outlook” report, Coinbase highlights the following developments that are set to shape the industry in 2025.
Stablecoins are at the forefront of Coinbase’s list, with the exchange noting that they are just getting started despite their explosive growth in 2024. According to Coinbase, stablecoins are considered crypto’s “killer app” and their use cases are expected to expand beyond simple trading. The report suggests that stablecoins will soon play a significant role in global capital flows and commerce.
Another trend to watch is the tokenization of real-world assets (RWAs). Coinbase predicts that RWAs will become a cornerstone of the current crypto market cycle in 2025. Firms are already experimenting with using tokenized assets as collateral for various financial transactions, which could streamline operations and mitigate risks. The tokenization trend is not limited to traditional assets like US Treasuries and money market funds, but is also gaining traction in private credit, commodities, corporate bonds, real estate, and insurance.
The report also highlights the exchange-traded fund (ETF) space as an area of interest. Coinbase expects institutional interest to focus on select crypto ETFs, with potential regulatory changes allowing for innovations like staking or in-kind redemptions within ETF products.
Decentralized finance (DeFi) is expected to witness a resurgence in 2025, according to Coinbase. The report notes that DeFi has evolved into a more sustainable and resilient ecosystem, with lending protocols experiencing record levels of total value locked (TVL) and decentralized exchanges (DEXs) increasing their share of trading volumes relative to centralized exchanges (CEXs).
Lastly, Coinbase emphasizes the importance of the regulatory climate in shaping the future of the crypto industry. The exchange predicts a major shift in regulations that will benefit the industry, citing the potential establishment of a comprehensive regulatory framework in the US, sound stablecoin legislation, and an end to regulation by enforcement. With a pro-crypto majority in both the House and Senate, Coinbase believes that the regulatory landscape will become more favorable for crypto participants.
In conclusion, the digital asset markets are poised for significant developments in 2025, driven by trends such as stablecoins, tokenization of assets, ETF innovations, DeFi resurgence, and regulatory advancements. These trends have the potential to reshape the industry and create new opportunities for growth and innovation. Stay informed and subscribe to updates to stay ahead of the curve in the dynamic world of cryptocurrencies.