Crypto in a bear market, rebound likely in Q3 — Coinbase

Key Points

  • Coinbase reports a shrinking crypto market with a 41% decrease in altcoin market cap from December 2024 to mid-April 2025.
  • Venture capital funding to crypto projects has decreased by 50%–60% from 2021–22, signaling a potential new 'crypto winter'.
  • Macroeconomic pressures like fiscal tightening and tariff policies are causing investment paralysis in the crypto sector.
  • Despite current bearish signals, Coinbase expects a potential market rebound in the second half of 2025.
  • Bitcoin's role as a market indicator is diminishing as the crypto market diversifies into sectors like DeFi and AI.

Summary

Coinbase's recent market review indicates a contraction in the crypto market, with the altcoin market cap dropping significantly from its peak in December 2024. The report highlights a drastic reduction in venture capital funding, suggesting the onset of another 'crypto winter'. Macroeconomic factors such as global tariffs and fiscal tightening are cited as reasons for the current bearish sentiment, impacting investment decisions and limiting new capital inflows into the crypto ecosystem. Despite these challenges, Coinbase remains optimistic, predicting a potential market turnaround in the latter half of 2025. The analysis also points out that traditional metrics like Bitcoin's performance are becoming less reliable for gauging the overall crypto market's health, as the sector expands into new areas like decentralized finance and AI, each with its own market dynamics. This diversification suggests a need for a more comprehensive approach to understanding market trends in the crypto space.

cointelegraph
April 16, 2025
Crypto
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