Coinbase’s recently released market outlook for 2025 has highlighted some key trends that are expected to shape the crypto landscape in the coming year. The report identifies tokenization, DeFi resurgence, and a shift towards pro-crypto regulation in the US as crucial factors to watch out for.

One of the most significant developments predicted for 2025 is the anticipated shift in US crypto legislation. After years of regulatory ambiguity, Coinbase believes that the upcoming year could bring about a pivotal change in how crypto is integrated into traditional financial and regulatory systems. The exchange points to a bipartisan pro-crypto majority in Congress as a signal of a favorable shift, with regulatory frameworks potentially transforming from obstacles into catalysts for industry growth. Additionally, the proposal of a Bitcoin Strategic Reserve by Senator Cynthia Lummis and Pennsylvania’s consideration of a similar act indicate growing government interest in incorporating Bitcoin into financial strategies.

Internationally, jurisdictions like the EU and financial hubs like the UAE, Hong Kong, and Singapore are also making strides in building regulatory frameworks to foster crypto innovation. This global momentum is expected to further accelerate crypto adoption and innovation on a larger scale.

The tokenization of real-world assets (RWA) is another trend that is projected to continue its growth trajectory in 2025. The market for RWA saw significant growth in 2024, reaching $13.5 billion by December and is estimated to expand to between $2 trillion and $30 trillion in the next five years. Traditional financial institutions are increasingly adopting tokenization, leveraging blockchain technology for near-instant settlements and 24/7 trading.

In the DeFi space, Coinbase highlights a shift towards a more mature and transparent phase, following a challenging cycle marked by unsustainable practices. The growing synergy between off-chain and on-chain capital markets is cited as a key driver of DeFi’s resurgence. With decentralized exchanges accounting for a larger share of trading volumes, the US regulatory environment is seen as a potential game-changer, enabling stablecoin governance frameworks and institutional access to DeFi.

Stablecoins and crypto-based exchange-traded funds (ETFs) are also expected to continue their growth trajectories in 2025. Stablecoin market capitalization surged by 48% in 2024, reaching $193 billion, with projections suggesting the sector could reach $3 trillion by 2030. The role of stablecoins in facilitating faster and cheaper payments positions them as a crucial element in future adoption, while ETFs for assets like Bitcoin and Ethereum have attracted significant institutional interest and could further enhance efficiency in the crypto ecosystem.

Overall, 2025 is shaping up to be a transformative year for the crypto industry, with key trends and developments expected to redefine the landscape and drive further adoption and innovation. The evolving regulatory environment, continued growth of tokenization, resurgence of DeFi, and the role of stablecoins and ETFs are all poised to play a significant role in shaping the future of crypto.