Crypto Industry Faces Worst Quarter Since FTX Collapse, Bitcoin and Ether Prices Plummet 33%

The crypto industry has just concluded its most challenging quarter since the FTX collapse, with Bitcoin (BTC) and Ether (ETH) prices experiencing their worst first quarter in seven years. Market sentiment plummeted to its lowest point since the last bear market, and Coinbase stock faced its most significant sell-off since the FTX debacle. Despite these setbacks, investors are now looking ahead to potential positive catalysts, such as favorable Spring seasonality, clarity on Trump’s tariff policy, and shifting policy winds at the Federal Reserve.

Coinbase, a key indicator for the crypto industry, saw its stock plummet by 33% in the first quarter. This decline occurred despite the company reporting strong business fundamentals and a solid revenue outlook. The downturn was attributed to the pressure of Trump’s tariff war, volatile digital asset prices, and tightening financial conditions from the previous quarter. However, Coinbase’s performance has shown resilience, with revenues more than doubling in 2024 to $6.6 billion and adjusted earnings rising to $3.3 billion, marking two consecutive years of growth.

Despite the market volatility, the Trump family has doubled down on its investments in the crypto industry. On March 31, Donald Trump’s sons, Eric and Donald Jr., announced their backing of a new crypto-mining venture called American Bitcoin. This venture, majority-owned by Hut 8, aims to become the world’s largest and most efficient pure-play Bitcoin miner while building a robust strategic Bitcoin reserve. The Trump family’s involvement in the DeFi project World Liberty Financial, which holds a large portfolio of digital assets, further underscores their commitment to the industry.

Tether, the stablecoin issuer, has also made significant moves in the first quarter. The company acquired 8,888 Bitcoin, bringing its total holdings to 100,521 BTC valued at roughly $8.7 billion. Tether’s ability to acquire Bitcoin and expand its venture capital business is largely due to its highly profitable stablecoin operations, which generated $13 billion in profit last year from its holdings of interest-bearing US Treasury bonds. Despite its success, Tether has faced negative reports from the media, industry, and politicians, with some suggesting it may need to sell a portion of its Bitcoin holdings to comply with forthcoming US stablecoin regulations. Tether has refuted these claims, stating that the conclusions are based on a lack of understanding of Bitcoin and Tether.

GameStop Corporation, the video game retailer turned meme stock, is set to add Bitcoin to its balance sheet after finalizing a $1.5 billion convertible debt offering. The company plans to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin. GameStop’s board approved the plan to invest in Bitcoin last month, also green-lighting the company’s acquisition of US dollar-denominated stablecoins. In addition to raising debt to buy Bitcoin, GameStop hinted at potentially using a portion of its cash reserves to fund future acquisitions.