The firm’s report, authored by David Duong, Global Head of Research at Coinbase Institutional, outlines conditions favorable for further growth across the digital asset space, including a potential new all-time high for Bitcoin.
Factors such as anticipated Federal Reserve rate cuts, stabilizing economic indicators, and bipartisan legislative momentum around crypto policy contribute to the firm’s optimistic stance.
Still, Coinbase’s research acknowledges risks, particularly the rise of corporate entities using debt to accumulate digital assets. These leveraged strategies, while accelerating adoption, may also introduce structural vulnerabilities if liquidity conditions tighten or investor sentiment shifts.
With companies now able to report crypto at fair market value following rule changes from the Financial Accounting Standards Board in late 2024, balance sheets holding BTC and other digital assets are becoming more common. However, the use of convertible debt to fund such strategies presents concerns around potential selling pressure during periods of market stress.
Duong notes that while these approaches have not yet created immediate instability, the lack of standardized funding models could become problematic over time.
However, Duong cautions that systemic vulnerabilities remain difficult to track, and broader corporate interest in this model continues to grow, leaving open questions about how resilient these strategies will be under future market pressure.
The US regulatory environment is also evolving, with pending legislation such as the GENIUS, STABLE, and CLARITY Acts potentially reshaping the crypto market by August.
These bills aim to clarify oversight roles between the SEC and CFTC, define stablecoin standards, and provide guardrails for institutional and retail engagement.
Meanwhile, the SEC is reviewing roughly 80 crypto ETF applications, ranging from staking-enabled products to single-asset altcoin funds, with decisions expected between July and October.
Featured image created with DALL-E, Chart from TradingView
