The cryptocurrency market has witnessed sharp declines over the past two weeks, with Bitcoin (BTC) and altcoins experiencing significant drops due to renewed Chinese tariffs imposed by US President Donald Trump. Despite these recent downturns, the expectation of a market rise persists.
Institutional Investor Sentiment
Coinbase, the largest cryptocurrency exchange in the United States, revealed in its latest survey that a significant 67% of institutional investors anticipate an increase in Bitcoin's value over the next six months. This sentiment highlights a continued belief in the long-term potential of the cryptocurrency.
The Coinbase report also indicated a difference in perspective regarding the current market cycle. While 45% of institutional participants believe the market is in a late-stage bull run, only 27% of non-institutional investors share this view. This suggests a more cautious approach among retail investors compared to their institutional counterparts.
Expert Analysis on Market Potential
David Duong, head of research at Coinbase Institutional, commented on the state of the crypto market, stating that there is still ample room for growth in Bitcoin and the broader cryptocurrency markets. He acknowledged that investors have become more cautious following the substantial crash on October 10th.
“There is still room for upside in the Bitcoin and cryptocurrency markets. We still see resilient liquidity conditions, strong macroeconomic backdrop, and supportive regulatory dynamics.”
Duong further emphasized that supportive macroeconomic factors and liquidity conditions, such as the Federal Reserve's anticipated two interest rate cuts and the potential for large money market funds to engage in buying, could influence market movements in the fourth quarter.
“Further rate cuts by the Fed and further fiscal and monetary stimulus in China could discourage more investors from investing.”
Factors Influencing the Crypto Market
The Coinbase survey report identified several key factors expected to drive the crypto market in the fourth quarter of 2025. According to Coinbase, liquidity, policy advancements, the performance of stablecoins, and the expansion of ETF infrastructure will be crucial determinants of whether the market continues its upward trajectory.
The report also pointed to excessive leverage and poor liquidity as the primary reasons behind the recent market correction, particularly affecting Bitcoin. Automatic liquidations on certain exchanges exacerbated liquidity constraints by limiting short positions for market makers. However, prices have since stabilized, and the market has entered a phase of gradual recovery.