Crypto Markets Poised for Q3 Growth, Say Coinbase and Glassnode

Coinbase Institutional and Glassnode are forecasting a positive third quarter for digital asset markets, citing improving macroeconomic conditions, evolving U.S. regulation, and increasing institutional engagement with crypto as key drivers of momentum.

Rate Cuts and Pro-Crypto Policy Fuel Optimism

According to a new joint outlook by Coinbase Institutional’s Head of Research David Duong, CFA, and analysts at Glassnode, multiple supportive forces are aligning. The report identifies easing recession concerns, anticipated interest rate reductions by the Federal Reserve, and a friendlier U.S. regulatory stance toward cryptocurrencies as major bullish catalysts.

The analysts highlight notable regulatory progress in the first half of 2025, including significant legislation surrounding stablecoins and a growing framework for broader digital asset regulation. One major new trend is the increasing adoption of Bitcoin by corporate treasuries, signaling deeper institutional involvement.

Market Metrics and Institutional Flows Reflect Strong Sentiment

Despite acknowledging potential risks tied to leveraged positions, Coinbase and Glassnode emphasize that these do not pose an immediate threat to market stability. Bitcoin’s market dominance reached 64% by June 30, the highest level in nearly four years.

Investor appetite is also reflected in record inflows to spot crypto exchange-traded funds. In Q2 alone, U.S.-based spot Bitcoin and Ethereum ETFs saw $14.6 billion in net inflows, far surpassing the $627 million seen in Q1. Stablecoin circulation also hit a new high, crossing the $230 billion mark, indicating growing liquidity and market participation.

On-chain analysis reveals improving investor sentiment as well. Bitcoin’s Entity-Adjusted Net Unrealized Profit/Loss (NUPL) shifted from the “Anxiety” phase to “Belief” during Q2. Additionally, the share of Bitcoin supply in profit surged to nearly 100%, up from less than 75% earlier in the year. Ethereum’s fundamentals also improved, with L2 and ETH transactions increasing by 7%, while transaction fees declined by 39%, suggesting greater network efficiency and usability.

Industry Voices Highlight Emerging Trends

Industry partners weighed in on additional trends shaping the market outlook:

• Bitwise revealed that U.S. spot Bitcoin ETFs have acquired 225% of all newly mined BTC since January 2024, significantly tightening supply.
• Grayscale pointed to the rise of decentralized AI-focused crypto projects, which now collectively hold a market value of approximately $15 billion.
• Parafi highlighted Polymarket, a blockchain-based prediction market platform that has maintained strong volume even after the 2024 U.S. election cycle.

Looking Ahead: Upside with Caveats

While a short-term correction remains possible, both Coinbase and Glassnode maintain that the likelihood of revisiting the low points of 2024 is minimal. A more aggressive stance by the Fed in cutting rates could accelerate growth, while deteriorating geopolitical conditions or global trade tensions could pose downside risks.