The cryptocurrency space experienced volatility in the initial quarter of 2025. CoinGecko’s Q1 Report on Crypto Industry showed signs of stagnation in the activities of market participants and a drastic decline in market capitalization too.
$633.5 Billion Losses: The Q1 Crypto Plummet
The report further adds that the total cryptocurrency market capitalization underwent a whopping 18.6% dip during the first quarter of 2025. The decline amounted to an eye-watering $633.5B loss from the industry’s peak on January 18, which was hit right before Trump took seat. At the end of the period, the market cap figure dotted $2.8 trillion, comparably lower than the earlier figure.
Investors Pull Away: Leading To Drying Volume
The above factors contributed in plummeting trading volumes too, the average trading volume per day took a hit by 27.3% quarter on quarter. Such decrease points towards a withdrawal phenomeon among traders which is likely characterized by heightened risks, lesser reliability on prevailing conditions and lack of activity given uncertainty.
Performance Lagging for Bitcoin: A Change in the Preferred Currency
For instance, with Bitcoin (BTC), a rally occurred at the start of the year with the price reaching a new all time high of 106,182 on January 22, but generally BTC trends downwards. As an example, by the end of Q1, Bitcoin experienced a price decrease of 11.8% settling at 82,514. Strikingly, there was still an increase of 4.6% in btc’s market cap stake during the quarter, reaching 59.1%, besting the figure not seen since Q1 2021. This indicates an upsurge flight towards Bitcoin’s relative stability as investors supported from the volatility volatility impacting other cryptocurrencies.
Struggles for Altcoins: More than just Ethereum
Ethereum (ETH) also struggled with its price falling by 3.9%. This drop in price also dragged Bitcoin’s market cap stake down to 7.9%, the lowest it has been from late 2019. Other altcoins also faced positions just slightly better than the rest of the pack with a 3.5% decline in market cap share dropping to 15.7%. In particular, only Ripple (XRP) and Binance Coin (BNB) were able to hold on to their portions of the market in the major cryptocurrencies.
Safe Havens: Gold and US Treasuries Outshine Crypto
Traditional safe-haven assets did outperform Bitcoin in this case and during the period of trouble in the market. In the first quarter of this year, Gold surged 18% due to US tariffs, geopolitical conflicts, and anticipations of interest rate reductions by the Federal Reserve, amongst other things. Moreover, US Treasuries were also attracting investors.
The Culprit: Trade Tariffs by Trump
Market aggression takes the blame primarily due to President Trump’s reciprocal tariff policies. These policies have injected an unprecedented amount of uncertainty regarding/global trade and economic relations, triggering a shift away from investment prone assets such as cryptocurrencies.
A Muddled Outlook: Sustained Fluctuating Markets Expected
Not all trends are a bad thing, but CoinGecko’s Head of Research Zhong Yang Chan added more concern as he quoted, “Crypto is not in a bubble on its own; it is part of the economy.” Alongside all other assets, crypto is also stuck in limbo and cannot shake off the uncertain outlook for all worlds finances for crypto till the global economy stabilizes more.
A Turbulent Quarter for Crypto
During the initial quarter of 2025, the cryptocurrency ecosystem emered for a challenging period. Losing market cap and trading volume was a result of trump’s tariff policies, global economic uncertainty, and a change in sentiment among investors. While Bitcoin managed to act as a safe haven of sorts, the rest of the market took another hit. The safe evolution of clutter markets will rely strongly on how blockchain disputes will be settled, global economic policy movements, and digital currencies proving to be dependably alternative investment assets.
