Coinbase’s Market Forecast: Q2 Stability and Q3 Growth for Cryptocurrencies

Coinbase anticipates initial volatility in the cryptocurrency market through mid-May 2025, with stabilisation expected in Q2 leading to growth in Q3. Global economic factors, trade policies, and institutional adoption are key influences on market trends. Despite short-term challenges, optimistic indicators for Q3 highlight the potential for significant gains, particularly with Bitcoin’s historical trends post-halving.

Coinbase’s Monthly Outlook for April 2025 suggests the cryptocurrency market may encounter volatility within the next 4-6 weeks before stabilising in mid-to-late Q2. This anticipated stabilisation is seen as an essential precursor to potential growth in Q3 2025, offering opportunities for investors. In parallel, a report from QCP Capital indicates a bullish sentiment for Q2 influenced by traditional finance (TradFi) market behaviours, despite expected negative fluctuations from April to mid-May.

Bitcoin (BTC) and the COIN50 index have recently dipped below their 200-day moving average (200DMA), hinting at a possible bearish cycle. The COIN50 index tracks the performance of the 50 most substantial digital assets by market capitalisation. Current volatility in the crypto market is attributed to global uncertainties, including new tariff policies and stringent fiscal measures affecting risk assets, necessitating a cautious approach from investors.

A Q1 2025 review by Morningstar aligning with Coinbase’s outlook expects continued Q2 volatility, primarily driven by trade policy and interest rate conjectures. Rising US-China trade tensions, coupled with an eighteen-year low for the Chinese Yuan (CNY), and a heightened “Extreme Fear” market sentiment further exacerbate uncertainties in cryptocurrency.

Looking towards Q3, Coinbase holds an optimistic view, anticipating price stabilisation in mid-to-late Q2 supported by various positive factors. Historical patterns indicate that following severe Q1 corrections, markets often regain stability in Q2. For instance, following Bitcoin’s plunge in March 2020, it stabilised between $6,000 and $7,000 before experiencing a significant subsequent upsurge.

ARK Invest’s “Big Ideas 2025” report forecasts a year marked by unprecedented growth in cryptocurrency, fuelled by institutional interest and technological progress. An easing of monetary policies and declining bond yields in early Q2 may bolster risk assets further. The rise of institutional adoption, particularly via spot Bitcoin ETFs, is expected to enhance market stability and growth, according to Coinbase’s analysis.

Coinbase projects that Q3 2025 will build upon the foundations laid in Q2, driven significantly by Bitcoin’s historical post-halving cycle which usually results in substantial price increases. This phase coincides with the upcoming post-halving cycle, promising potential gains. Moreover, potential approvals for additional crypto ETFs and improved regulatory frameworks are anticipated to further uplift the market.