Crypto’s Year-End Outlook Remains Constructive Despite Shakeout, Says Coinbase Institutional
Crypto markets endured a sharp pullback earlier in October, but Coinbase Institutional’s “Charting Crypto: Navigating Uncertainty” report — produced in collaboration with Glassnode — suggests the broader setup remains constructive.
The firm characterizes its stance as cautious but biased higher following the Oct. 10 shakeout, attributing the slide to excessive leverage meeting thin order books and a cascade of auto-deleveraging across several exchanges.
While the correction drained liquidity and tested sentiment, prices stabilized into the weekend. However, Coinbase notes that macroeconomic jitters — including uncertainty around U.S. data delays and global growth — continue to weigh on confidence.
Liquidity and Policy at the Core of Coinbase’s Outlook
According to Coinbase, liquidity remains the linchpin for crypto’s performance into year-end. Its proprietary Global M2 Money Supply Index — which historically tracks bitcoin’s direction and tends to lead by roughly 110 days — began Q4 in a supportive posture.
Still, the report cautions that global financial conditions could tighten later in the quarter. Coinbase expects two additional Federal Reserve rate cuts before year-end, potentially freeing capital from money-market funds and redirecting it toward risk assets like crypto.
Stablecoin and ETF Growth Strengthen Market Infrastructure
The report also highlights how policy and “market plumbing” continue to evolve constructively. Stablecoin supply and on-chain payment volumes sit near record highs, which Coinbase views as evidence of increasing blockchain adoption for real-world transfers.
Stablecoin market cap (Source: DefiLlama)
Meanwhile, the deepening of U.S. spot ETF infrastructure for both bitcoin and ether is helping traditional investors access crypto exposure more efficiently. Coinbase argues that such developments are not mere headlines but foundational upgrades — the rails that keep liquidity and usage flowing, even through bouts of volatility.
Bitcoin Favored as Macro Hedge; Ether Shows Constructive Signs
On positioning, Coinbase Institutional maintains a clear preference for bitcoin, citing its “digital gold” characteristics amid lingering concerns about fiscal and monetary discipline. Ether also looks constructive, as scaling efforts have pushed more activity to layer-2 networks while fees have declined — fostering renewed investor optimism.
A survey included in the report shows that a majority of institutional investors remain bullish on bitcoin over the next three to six months, even as many acknowledge macro conditions as the biggest near-term risk.
Digital-Asset Treasuries: A Quiet but Important Buyer Base
Coinbase draws attention to digital-asset treasury companies (DATs) — firms that hold crypto reserves like BTC and ETH as part of their corporate strategy. These entities have become meaningful, relatively steady buyers of major digital assets, now controlling a growing share of circulating supply.
However, Coinbase notes that the group’s long-term business models remain under scrutiny following recent equity-market weakness in the sector.
Risks Persist, But Foundations Are Strengthening
Despite its constructive tone, Coinbase flags several potential hazards: the impact of missing U.S. government data amid the ongoing shutdown, possible liquidity thinning in November, and uncertainty around DAT sustainability. The firm advises investors to keep sizing conservative and time horizons disciplined.
Still, the overall conclusion remains positive — liquidity, policy progress, and on-chain adoption trends continue to underpin crypto markets into the year’s close, with bitcoin best positioned to lead if these supports persist.
