Coinbase’s latest 2025 market outlook identifies tokenization, the DeFi revival, and the shift to cryptocurrency-friendly regulation in the U.S. as key trends for the coming year.
Coinbase expects 2025 to be a pivotal year for U.S. cryptocurrency legislation after years of ambiguous regulation. The exchange said these developments could redefine how cryptocurrencies are integrated with traditional financial and regulatory systems in the future.
Pro-crypto regulations
According to the exchange, bipartisan pro-crypto advocates in Congress signal favorable changes that will transform the regulatory framework from an obstacle to a catalyst for industry growth. Additionally, tHe further solidified the evolving attitude among lawmakers by pushing for a strategic Bitcoin (BTC) reserve.
In August, Senator Cynthia Lummis suggested an ideaThen Pennsylvania Considerations The Bitcoin Strategic Reserve Act allows states to allocate up to 10% of their general funds to cryptocurrencies.
Although legal challenges remain, these plans signal growing government interest in incorporating Bitcoin into financial strategies.
Internationally, jurisdictions such as the EU and financial hubs such as the UAE, Hong Kong and Singapore are also establishing frameworks to foster innovation through phased Market for Crypto Assets (MiCA) regulations. This global momentum could further fuel cryptocurrency adoption and innovation.
A $30 Trillion Opportunity
Tokenization of real-world assets (RWA) has gained significant traction in 2024, with the market growing by more than 60%, reaching $13.5 billion by December. Forecasts suggest that this sector could expand to massive levels of between $2 trillion and $30 trillion within the next five years.
The report noted that traditional financial institutions are increasingly adopting tokenization, which uses blockchain technology to enable near-instant payments and 24/7 transactions. The scope of tokenization is expanding to include government securities, private credit, commodities, corporate bonds, and even real estate.
While issues such as liquidity fragmentation across multiple blockchains persist, the report notes developments in these areas, suggesting that tokenization can streamline the investment process and portfolio construction.
DeFi Brings Back Utility
After a challenging cycle characterized by unsustainable practices, decentralized finance is now transitioning to a more mature and transparent phase. Coinbase highlighted the growing synergies between off-chain and on-chain capital markets as a key driver of DeFi’s return.
Changes in the U.S. regulatory environment could be a game changer in enabling stablecoin governance frameworks and institutional approaches to DeFi. Decentralized exchanges now account for 14% of centralized exchange trading volume, reflecting growing adoption. This is up from 8% at the start of 2023.
Federal Reserve President Christopher Waller endorsement DeFi’s complementary role to centralized finance adds credibility to the sector’s potential.
Additionally, innovations such as smart contracts and stablecoins are increasingly seen as tools to increase efficiency and reduce risk in traditional financial systems.
Stablecoins and ETFs
Stablecoins and cryptocurrency-backed exchange-traded funds (ETFs) have recorded significant growth trajectories in 2024, and Coinbase also sees this as a key theme for 2025.
Stablecoin market capitalization has increased 48% to $193 billion, and the sector is expected to reach $3 trillion by 2030.
Its role in facilitating faster, cheaper payments and addressing global financial needs is a cornerstone of future adoption.
Meanwhile, the spot Bitcoin and Ethereum (ETH) ETF launched in 2024 has attracted significant institutional interest. Their total net inflows approached $40 billion in less than a year.
Innovations such as spot issuance and redemption of ETFs can further solidify the role of ETFs in the cryptocurrency ecosystem by improving efficiency and reducing costs.