Crypto Market Set for Q3 Growth, Say Coinbase Institutional and Glassnode

Coinbase Institutional and blockchain analytics firm Glassnode are projecting a positive trajectory for the cryptocurrency sector in the third quarter of 2025, pointing to a blend of regulatory advancements, macroeconomic easing, and increasing enterprise participation as key drivers.

Positive Tailwinds: Fed Policy & Regulatory Progress

In their latest joint outlook, David Duong, CFA, Head of Research at Coinbase Institutional, along with analysts at Glassnode, identified several converging factors supporting a bullish Q3 outlook. Among them: expectations of potential interest rate cuts by the Federal Reserve, receding fears of a recession, and a notable shift in the U.S. regulatory stance toward crypto-friendly frameworks.

The report highlights the first half of 2025 as a period of historic progress for digital asset regulation. With new stablecoin laws passed and broader crypto policy frameworks advancing, market participants are responding with increased confidence. A particularly significant trend is corporate treasuries allocating funds into Bitcoin, introducing a new and substantial demand channel.

Market Data: Institutional Inflows and Onchain Signals

While both Coinbase and Glassnode acknowledge potential medium-term volatility—particularly from leverage—they see no immediate red flags. On the contrary, Bitcoin’s market dominance surged to 64% by the end of June, approaching levels not seen in nearly four years.

Institutional enthusiasm is evident in Q2 net inflows to U.S. spot Bitcoin and Ethereum ETFs, which totaled $14.6 billion, a dramatic increase from the $627 million recorded in Q1. At the same time, stablecoin supply reached an all-time high, exceeding $230 billion—another signal of increased liquidity and market activity.

Blockchain data also reveals improving investor sentiment. Metrics like Bitcoin’s Entity-Adjusted Net Unrealized Profit/Loss (NUPL) moved from the “Anxiety” phase to “Belief” during Q2, suggesting growing market conviction. The percentage of Bitcoin supply in profit nearly hit 100%, up from below 75% earlier in the year.

Ethereum also showed signs of strengthening. Layer 2 activity and ETH transactions climbed 7%, while transaction fees declined by 39%, indicating greater network efficiency and broader adoption.

Industry Contributors Highlight Emerging Trends

Several partners contributed key insights that reinforce the bullish narrative:

• Bitwise pointed out that since the beginning of 2024, U.S. spot Bitcoin ETFs have purchased more than twice the amount of newly mined BTC—a 225% acquisition rate—intensifying supply-side pressure.
• Grayscale called attention to the rise of decentralized AI-focused crypto projects, which now collectively hold a market capitalization of around $15 billion.
• Parafi spotlighted Polymarket, a decentralized prediction market platform that has maintained strong trading volumes even after the 2024 U.S. elections.

Outlook and Risks

While a market correction can’t be ruled out, Coinbase and Glassnode believe that a return to the lows seen in 2024 is unlikely. Factors that could further boost prices include a more aggressive Fed easing cycle, whereas deteriorating geopolitical or trade conditions could present downside risk.