Coinbase’s latest market report paints a mixed picture for the cryptocurrency market, showing signs of decline but also the potential for recovery later this year.
The report, released on April 15, shows that altcoin market capitalization has fallen 41%, from $1.6 trillion in December 2024 to around $950 billion by mid-April 2025. This marks a significant contraction, with the market hitting a low of $906.9 billion on April 9. Venture capital funding for crypto projects has also fallen 50-60% from its 2021-2022 highs, factors that contribute to a bleak outlook for the industry.
Coinbase Global Head of Research David Duong noted that these issues, combined with global trade tariffs and ongoing economic uncertainty, could signal the start of a new “crypto winter.” Duong stressed that the decline in investor sentiment and reduced venture capital interest in cryptocurrencies is largely related to broader macroeconomic pressures, including fiscal tightening and tariffs.
However, the report does not rule out the possibility of a recovery. Coinbase believes that the market could stabilize in the middle to late second quarter of 2025, paving the way for a potential rebound in the third quarter. Coinbase’s analysis emphasizes that the traditional 20% drop that is often used to define a bear market is no longer applicable in the current cryptocurrency market. Instead, they recommend relying on more complex indicators such as risk-adjusted returns and the 200-day moving average to measure market changes.
Compared to altcoins, Bitcoin has performed relatively steadily. Although it has experienced some declines, the declines are not as large as many altcoins. However, according to Coinbase data, the price of Bitcoin recently fell below the 200-day moving average, which is a key technical indicator that foreshadows changes in the overall market. In addition, the Coinbase COIN50 index, which tracks the top 50 non-Bitcoin tokens, also fell below the 200-day moving average, indicating that the overall market may continue to be weak.
Volatility in emerging sectors such as memecoins, decentralized physical infrastructure networks (DePINs), and AI-related tokens are adding to the overall market’s instability. Coinbase noted that these sectors are more susceptible to price swings, making Bitcoin a less reliable indicator of overall market direction. Duong said that as Bitcoin increasingly becomes a “store of value,” assessing the broader cryptocurrency market may require new approaches and taking into account the growing diversity of the sector.
While the short-term outlook remains cautious, Coinbase remains optimistic about the potential for a market recovery in the second half of 2025. Given that market conditions remain uncertain, the company advises investors to remain flexible and cautious. However, if global economic factors improve, Coinbase expects the market to be stronger in the second half of 2025.
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