US-based crypto exchange Coinbase says there will be five major trends in the digital asset markets next year.
In a new “Crypto Market Outlook” report, Coinbase begins its list of stablecoins saying they are “just getting started” after the sector’s explosive growth in 2024.
Coinbase says stablecoins are crypto’s “killer app” and that their use case will soon expand beyond simple trading.
“As stablecoins continue their rise, we are quickly approaching the day when their first and primary use case will be global capital flows and trading, rather than trading.”
Next on the list is the tokenization of real-world assets (RWAs), which Coinbase says will become a cornerstone of the current crypto market cycle by 2025.
“Companies are experimenting with using tokenized assets as collateral for other financial transactions, such as derivatives transactions, which can streamline their operations and mitigate risk. In addition, the RWA trend is expanding beyond assets such as US Treasuries and money market funds to include private credit, commodities, corporate bonds, real estate and insurance.”
The third area to watch, according to Coinbase, is the exchange-traded fund (ETF) space.
Coinbase says it expects institutional interest to remain concentrated within a select number of crypto ETFs. The crypto exchange is also interested in potential rule changes that regulators could implement, such as allowing ETF products to include staking or in-kind redemptions.
The next step is decentralized finance (DeFi). Coinbase says DeFi will witness a “resurgence” that will propel it into a new era and expand its reach.
“Decentralized finance (DeFi) took some hits in the last cycle, but a more sustainable and resilient ecosystem has emerged. Credit protocols are reaching record highs in total value locked (TVL), while decentralized exchanges (DEXs) are pushing their share of trading volumes – relative to centralized exchanges (CEXs) – to unprecedented levels.”
The fifth area in the crypto markets that Coinbase should pay attention to is the regulatory environment, which the exchange says will see a major shift that will boost the industry. Coinbase says a pro-crypto majority in both the House of Representatives and the Senate will boost crypto in 2025.
“Specifically, we expect the establishment of a comprehensive regulatory framework in the US, the introduction of robust stablecoin legislation and an end to the era of regulation through enforcement.
And the US isn’t the only jurisdiction poised to make regulatory progress. Many G20 countries and major financial centers are writing rules to accommodate digital assets, which should help create a more favorable environment for innovation and growth. Taken together, these steps can open the door for more people and institutions to confidently participate in the crypto economy.”
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