Coinbase predicts crypto-protein surge in 2025, but leverage may be a time bomb
According to Coinbase Institutional, the outlook for the crypto market in the second half of 2025 remains constructive, with the agency highlighting a mix of macroeconomic trends, improving regulatory clarity and increasing corporate participation as a key square trend.
Written by David Duong, global research leader at Coinbase Institutional, the company’s report outlines the conditions that will benefit further growth in the digital asset space, including a potential new all-time high for Bitcoin.
Factors such as lowering the Federal Reserve, stabilizing economic indicators, and bipartisan legislative momentum surrounding crypto policies contribute to the company’s optimistic stance.
Nevertheless, Coinbase’s research acknowledges risks, especially the rise of corporate entities that use debt to accumulate digital assets. While these leverage strategies are accelerating adoption, they may also introduce structural vulnerability if liquidity conditions tighten or investor sentiment shifts.
As companies are now able to report cryptocurrencies at fair market value, balance sheets holding BTC and other digital assets are becoming increasingly common under the rules changes of the Financial Accounting Standards Commission at the end of 2024. However, the use of convertible debt to fund such strategies raises concerns about potential sales pressure during market stress.
Leveraged corporate strategy has attracted people’s attention to market stability
According to data cited by Coinbase, about 228 publicly traded companies jointly held more than 820,000 BTC as of mid-2025. About 20 companies, as well as several other engaging with Ethereum, Solana and XRP, are pursuing leveraged acquisition strategies inspired by companies such as Strategies (formerly MicroStrategy) (formerly MicroStrategy).
Duong notes that while these methods have not caused immediate instability, the lack of standardized funding models can become a problem over time.
If market conditions worsen or the debt maturity approach worsens, companies may be forced to sell most of their crypto reserves to meet their obligations, potentially increasing volatility.
Coinbase estimates that most of these companies’ outstanding debts won’t mature until 2029 or later, which may help mitigate short-term risks. Additionally, if the loan-to-value ratio remains moderate, the companies involved can still use refinancing or liquidity management programs to reduce the likelihood of emergency asset liquidation.
However, Duong warned that systemic vulnerability remains difficult to track and that wider corporate interest in the model continues to grow, leaving questions about how these strategies will resilience under future market pressures.
Regulatory development and broader prospects
The regulatory environment in the United States is also evolving, with genius, stability and clear waiting for legislation likely to reshape the crypto market by August.
These bills are designed to articulate the supervisory role between the SEC and the CFTC, define the Stablecoin standard, and provide guardrails for institutional and retail participation.
Meanwhile, the SEC is reviewing about 80 crypto ETF applications, from points-enabled products to single-asset Altcoin funds, with decisions expected between July and October.
Coinbase concluded that despite the risks, especially leveraged players, the long-term trajectory of Bitcoin is still rising. The company expects a broader macro trend, institutional adoption and regulatory progress to support continued expansion into the end of 2025, so select AltCoins also positioned it as a benefit based on project-specific fundamentals.
Feature images created with DALL-E, TradingView’s chart
Editing process For Bitcoin experts, focus on thorough research, accurate and impartial content. We adhere to strict procurement standards and each page is diligently evaluated by our top technical experts and experienced editorial team. This process ensures the integrity, relevance and value of our content to our readers.
