Coinbase Institutional’s 2025 Q4 Crypto Outlook
In a recent report titled “Charting Crypto: Navigating Uncertainty,” Coinbase Institutional has a somewhat optimistic view on the year-end prospects for cryptocurrencies. This report was produced in collaboration with Glassnode.
The analysis indicates a cautious but upward bias, particularly in light of the market fluctuations observed around October 10. Coinbase attributes the recent drop in prices to excessive leverage linked to a thin order book, worsened by automatic deleveraging measures on some exchanges. These conditions, it seems, limited short selling by market makers, which in turn drained liquidity. While prices have stabilized over the weekend, there’s still a sense of hesitation as broader economic concerns re-emerge.
At the core of Coinbase’s perspective are liquidity concerns and macroeconomic factors. The firm’s Global M2 Money Supply Index—historically linked to Bitcoin and generally leading by around 110 days—has started this quarter on a stronger note. Still, the report does sound a note of caution, suggesting that conditions could tighten later in the quarter. Additionally, Coinbase anticipates two more interest rate cuts from the Federal Reserve before year-end. This could lead to some funds being pulled from money market accounts back into riskier assets.
The interplay between policies and market dynamics creates what Coinbase sees as a potentially favorable situation for cryptocurrencies.
Interestingly, the report points out that stablecoin supply and monthly transaction volumes are hitting or nearing record numbers. Coinbase interprets this as a sign of increasing on-chain payments and transfers. It also highlights the growing infrastructure for Bitcoin and Ether spot ETFs in the U.S., which is believed to enhance accessibility for traditional investors and strengthen market depth. It seems these advances might be underpinning usage and liquidity more effectively than sensational headlines would suggest.
On the positioning front, Coinbase favors Bitcoin, referring to it as “digital gold” amidst ongoing doubts about fiscal management. Ether, too, appears to be in a good place, benefiting from advances in scaling technologies, which have decreased transaction fees and increased Layer 2 network activity. Investor feedback included in the report reveals that many financial institutions view the macro landscape as their biggest obstacle but remain optimistic about Bitcoin over the next few months.
Coinbase also discusses the role of Digital Asset Treasury (DAT), characterizing it as a significant yet relatively stable buyer of both BTC and ETH. This group accounts for a considerable share of the circulating supply and is viewed as a key source of demand. However, there are still unresolved questions regarding its long-term viability, especially with the recent downturn in the stock market.
Short-term risks aren’t overlooked either. The report notes the uncertainty surrounding U.S. economic data in light of the government shutdown, with potential liquidity issues looming in November and unresolved aspects concerning DAT. Thus, caution in investment sizing and duration seems prudent.
Nevertheless, Coinbase Institutional’s performance has remained consistent, and the combination of liquidity conditions, policy movements, and rising on-chain activities—facilitated by the maturation of stablecoins and ETFs—looks set to provide support as the year wraps up. If these elements hold steady, Bitcoin might just be in the best position to lead the market.
