Coinbase Predicts Crypto Market Stability by Mid-2025

Coinbase has forecasted short-term volatility in the cryptocurrency market, expecting this period of instability to persist until mid-May 2025. The primary drivers of this volatility are economic pressures and uncertainties surrounding trade policies. These factors are creating a challenging environment for risk assets, including cryptocurrencies, as tight fiscal policies and macroeconomic conditions exert additional pressure.

Despite the current volatility, Coinbase anticipates that the market will begin to stabilize in mid-to-late Q2 2025. This stabilization is expected to lay a strong foundation for growth in the subsequent quarter, Q3 2025. Historical trends support this outlook, as markets often stabilize after sharp corrections in Q1. For instance, following Bitcoin's drop from $10,000 to $3,850 in March 2020, the market stabilized around $6,000-$7,000 by May-June before surging later that year.

Coinbase's optimism for Q3 2025 is bolstered by several factors. The post-halving cycle of Bitcoin, which historically triggers significant price increases, aligns with this period. Additionally, growing institutional adoption, particularly through spot Bitcoin ETFs, is expected to drive market growth. Clearer US crypto regulations and technological advancements in blockchain are also anticipated to support market stability and expansion.

Furthermore, looser monetary policies and declining bond yields in early Q2 could provide additional support for risk assets. These factors, combined with the potential approval of more crypto ETFs in the US and improved regulations, could further propel the market in Q3 2025. Coinbase advises investors to remain cautious and adopt defensive risk strategies during this period of short-term volatility, while also preparing for the potential opportunities that may arise in the coming months.