Coinbase sees bullish crypto outlook for 2025, but flags ‘systemic risks’ from leveraged corporate bitcoin bets

Crypto markets are set for a constructive second half of 2025, underpinned by improved U.S. economic growth expectations, potential Fed rate cuts, rising corporate treasury adoption, and greater regulatory clarity, according to Coinbase Institutional.

While risks remain — including a steepening yield curve and potential forced selling pressure from publicly traded crypto vehicles — these appear manageable for now, according to David Duong, Coinbase Institutional’s Global Head of Research, who wrote in a report on Thursday.

Duong continues to expect more upside in the crypto market over the next three to six months, forecasting new all-time highs for bitcoin in the second half of the year as macro disruption from tariffs fades and pro-growth U.S. policies take shape. However, rising long-term yields, driven by concerns about deficits, could tighten financial conditions and unsettle markets. If growth expectations disappoint, risk assets may face volatility, though store-of-value assets like bitcoin and gold could benefit as the dollar’s dominance declines, he said.

Crypto market cap as a percentage of global liquidity is rising. Image: Coinbase Institutional.

‘Attack of the clones’

A growing number of public companies are embracing bitcoin-backed balance sheets, with 228 firms now holding a combined 820,000 BTC. According to Galaxy Digital, around 20 of these, along with several others holding ETH, SOL, or XRP, are using a leveraged funding model pioneered by Strategy (formerly MicroStrategy). This surge in activity follows a key accounting shift that went into effect in December 2024, when new Financial Accounting Standards Board rules allowed companies to report crypto holdings at fair market value — removing a major hurdle that previously limited them to reporting impairments without unrealized gains under U.S. Generally Accepted Accounting Principles, Duong said.

While corporate adoption is rising, Duong warned that the emergence of publicly traded crypto vehicles focused solely on asset accumulation as their primary goal introduces “systemic risks.” Many of these firms raise capital through convertible debt to buy crypto, leaving them vulnerable to forced selling during market stress or motivated discretionary selling that could spook investors, he noted. 

“Ultimately, we think it’s unlikely that the downside pressure posed by either risk would mirror what we’ve seen with some of the failed crypto industry projects in the past,” Duong said. “First, most of the debt from these entities will ultimately not mature until late 2029 to early 2030 based on our inventory of outstanding debt across nine entities, suggesting forced selling pressure is not a concern in the very short term. Moreover, so long as the loan-to-value (LTV) ratios stay reasonable, we believe that the largest companies are likely to have access to refinancing methods that may help them navigate the situation without necessarily liquidating their reserve holdings.”

However, the outlook could change as debts mature or more firms adopt leveraged strategies, Duong acknowledged. With no standard funding model in place, tracking risk is challenging, but corporate interest remains high, and market saturation has not yet been reached. Hence, the accumulation trend still has room to grow in the second half of 2025, he said.

Sharp rise in BTC wallets with balances over $1 million. Image: Coinbase Institutional.

On Wednesday, regulated digital asset bank Sygnum also warned that such ownership concentration risks undermine bitcoin’s credibility as a central bank reserve asset.

Fading recession risks and crypto regulatory clarity

Fears of a technical U.S. recession have eased after early 2025 trade disruptions sparked concerns, especially following a slight Q1 GDP contraction, in Duong’s view. Furthermore, recent data shows the Atlanta Fed’s GDPNow estimate jumping to 3.8% as of June 5, suggesting stronger growth momentum, he noted. The analyst, therefore, believes that a severe recession is unlikely, expecting either a mild slowdown or continued expansion. With global liquidity rising and tariff impacts also fading, Coinbase Institutional sees limited downside for asset prices — reinforcing its bullish view on bitcoin for the remainder of the year, Duong said.

The U.S. is also undergoing a major regulatory shift in 2025, with bipartisan momentum behind stablecoin legislation and broader efforts to define crypto market structure, in a dramatic change from the previous administration’s “regulation by enforcement” approach, the analyst noted. The GENIUS and STABLE Acts could be unified and passed before the August recess, establishing key rules for reserves, compliance, and consumer protections. Meanwhile, the CLARITY Act aims to clarify SEC and CFTC oversight roles, setting the stage for long-term policy transformation, he said.

Separately, the SEC is currently reviewing around 80 pending crypto ETF proposals, including multi-asset funds, staking-enabled products, and single-name altcoin ETFs for cryptocurrencies like Solana, XRP, Litecoin, and Dogecoin. Key decisions on these applications could arrive between July and October, with outcomes likely to shape market dynamics heading into 2026, Duong said.

“Despite the risks, we think bitcoin’s upward trend is expected to continue,” Duong concluded. “That said, although we’re confident about bitcoin’s trajectory, we think only select altcoins may perform well depending on their idiosyncratic circumstances.”

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