Crypto Market Posts Weakest Q1 in Years, Bitcoin Down 11.82%, Ether 45.41%

Despite recent major developments in the crypto industry, the market has just posted its weakest Q1 performance in years. The first quarter of 2025 saw significant price declines for Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market capitalization, with decreases of 11.82% and 45.41%, respectively. Historically, Q1 has been a strong quarter for both assets, with Bitcoin averaging a 51.2% increase and Ether a 77.4% increase since 2013.

Bitwise chief investment officer Matt Hougan described the past quarter as "frustrating," calling it the "best worst quarter in crypto’s history." Hougan pointed to several catalysts that could help crypto deliver more upside in Q2. One key factor is the rise in global money supply, as central banks across the globe signal a shift toward monetary easing and M2 expansion. Historically, these conditions have been favorable for risk assets, particularly for digital assets.

Another bullish factor for the crypto market is the "clean sweep of pro-regulations" in the US. Hougan noted that this regulatory clarity is just getting started and could have a long-term positive impact on the market. Additionally, the rise in stablecoin assets under management, which surged to an all-time high of over $218 million during the first quarter, may also be a positive indicator for the crypto market. Growing stablecoin adoption is expected to benefit adjacent sectors, including DeFi and other crypto applications.

Geopolitical chaos seen in the global economy during Q1 2025, mainly after US President Donald Trump’s inauguration through his tariffs, is pushing global investors to reassess their portfolios. This reassessment could lead to increased investment in crypto assets as investors seek alternative safe havens.

According to the analyst's forecast, Bitcoin may surge approximately 138% from its current price of $84,080 by the end of the year. In December, Bitwise predicted that Bitcoin would end the year at $200,000, and Hougan still believes that this prediction is in play. Meanwhile, crypto exchange Coinbase recently said, “When the sentiment finally resets, it’s likely to happen rather quickly, and we remain constructive for the second half of 2025.”

In summary, despite the weak performance in Q1, several factors could turn crypto prices around in Q2. The rise in global money supply, pro-regulations in the US, growing stablecoin adoption, and geopolitical chaos are all potential catalysts for a market rebound. While the future of the crypto market remains uncertain, these factors provide a glimmer of hope for investors looking to capitalize on the next bull run.