Against all expectations, the crypto market started 2025 in decline, which took investors by surprise. Bitcoin and Ether, usually strong performers in the first quarter, recorded their worst historical performances over this period. This sharp reversal, breaking from known seasonal dynamics, rekindles debates about a possible rebound in the second quarter, while economic uncertainties weigh on all risk assets.

A Contrary Start to the Year for Bitcoin and Ether

Bitcoin and Ether, the two main cryptos by market capitalization, fell by 11.82 % and 45.41 % respectively during the first quarter of 2025.

This decline contrasts with their historical performances during this period. Since 2013, the first quarter has represented on average the second-best quarter for Bitcoin (+51.2 %) and the best for Ether (+77.4 %), according to CoinGlass data.

Matt Hougan, Chief Investment Officer at Bitwise, did not mince words: “Frustrating. That’s the word that best describes the past quarter“. He even referred to the period as the “best worst quarter in crypto history“.

According to the analysis published by Bitwise, several factors weighed on crypto performance in recent months:

• The impact of U.S. economic policies, notably tariff measures adopted by President Donald Trump, which have generated trade tensions and macroeconomic instability ;
• The caution of institutional investors, uncertain about the direction markets will take amid a possible global recession ;
• The lack of positive catalysts, despite the initial enthusiasm around the launch of spot Bitcoin ETFs, which was insufficient to sustain market momentum ;
• A correction effect linked to significant gains recorded at the end of 2024, which triggered a natural portfolio rebalancing.

Signs of Reversal Emerging for the Second Quarter

Despite this difficult start, several indicators could reverse the trend in the second quarter. Matt Hougan identifies four factors likely to fuel a recovery.

First, the expansion of the global money supply, with central banks increasingly inclined to adopt flexible policies, could favor risky assets.

“Historically, these conditions have been favorable for cryptos“, he claims. This analysis is shared by Pav Hundal, Senior Analyst at Swyftx, who noted in February that “global stimulus measures are normally a reliable indicator for crypto“.

A second lever is identified on the regulatory front. Hougan refers to an ongoing “pro-crypto regulatory clarification” in the United States. Furthermore, he considers it an undervalued but promising turning point for the ecosystem.

At the same time, the steady growth of stablecoins is another encouraging factor, as assets under management in this segment have reached a historic high. They surpassed 218 million dollars during the first quarter.

This dynamism is seen as a catalyst for related sectors such as DeFi. Finally, investors’ tendency to reassess their portfolios amid current uncertainties could strengthen the appeal of cryptos.

While Matt Hougan maintains his bold prediction of a bitcoin at $200,000 by the end of the year, he points out that the potential reversal “has not yet been triggered, but could occur quickly when sentiment shifts“. For now, the second quarter appears to be a potential turning point, closely watched by analysts and investors, in a context increasingly influenced by complex macroeconomic and political dynamics.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.