- Coinbase Institutional projects a cautiously positive crypto market for Q4 2025, underpinned by favorable liquidity conditions, stablecoin growth, and progress on policy.
- The firm favors Bitcoin to lead the market, citing its “digital gold” status, while Ethereum also appears constructive due to scaling advancements and lower fees.
- Despite the bullish outlook, the report highlights significant near-term risks, including a potential liquidity fade in November, missing U.S. economic data, and uncertainty surrounding digital-asset treasury companies.
- An investor survey included in the report confirms this sentiment, showing a majority of institutions are bullish on BTC for the next three to six months.
Crypto’s Year-End Outlook: Cautiously Optimistic
Coinbase Institutional has released its Q4 2025 outlook, signaling a “cautious but biased higher” stance for the digital asset market into the year’s end. According to its “Charting Crypto: Navigating Uncertainty” report, the market cycle still skews positive, though it is not without significant risks that demand disciplined investment strategies.
The report comes after a market shakeout on October 10, which Coinbase attributed to heavy leverage clashing with thin order books. While prices have since stabilized, the firm notes that macro-economic jitters continue to loom, creating a tentative market atmosphere.
Bullish Catalysts Fueling Positive Sentiment
At the heart of Coinbase’s constructive outlook are several key factors related to liquidity, policy, and market infrastructure.
Liquidity and Macro Tailwinds
Coinbase points to its Global M2 Money Supply Index, a metric that has historically led Bitcoin’s price movements, which began the quarter in a supportive position. Furthermore, the firm anticipates two more Federal Reserve rate cuts before the end of the year. This shift could push cash out of money-market funds and back toward riskier assets like cryptocurrencies.
Strengthening Market Rails
The report emphasizes that the underlying “plumbing” of the crypto market is getting stronger. It highlights two key developments:
- Stablecoins: Supply and monthly volumes are at or near all-time highs, which Coinbase interprets as evidence that more payments and transfers are moving on-chain.
- ETFs: The infrastructure for U.S. spot ETFs for both Bitcoin and Ether continues to deepen, improving market access for traditional investors and enhancing market depth.
Asset Outlook: Bitcoin and Ether Poised to Lead
Coinbase favors Bitcoin to lead any potential rally, citing its established role as “digital gold” amid ongoing concerns about global fiscal and monetary policies. This view is supported by an investor survey in the report, which shows that a majority of institutional investors are bullish on BTC over the next three to six months.
Ether also looks constructive, according to the firm. Progress in layer-2 scaling solutions has successfully moved more activity to these networks, resulting in lower transaction fees and improved sentiment compared to earlier in the year.
Lingering Risks and A Call for Caution
While the overall outlook is positive, Coinbase’s report does not dismiss near-term hazards. It urges investors to remain disciplined, flagging several key risks:
- November Liquidity Fade: There is a chance that market liquidity could tighten later in the fourth quarter.
- Missing Data: The recent U.S. government shutdown has created gaps in economic data, increasing uncertainty.
- Treasury Companies: While digital-asset treasury companies (DATs) have been steady buyers of BTC and ETH, questions remain about their long-term business models.
Ultimately, Coinbase Institutional’s message is one of balanced optimism. The foundational supports—liquidity, policy, and on-chain usage—remain strong, but navigating the final quarter of 2025 will require a keen awareness of the persistent risks.
Image Referance: https://www.coindesk.com/markets/2025/10/19/coinbase-institutional-highlights-three-catalysts-that-could-lift-crypto-in-q4-2025