Kaiko Report Reveals Q1 Crypto Market Decline and Q2 Outlook
In Q1 2025, Bitcoin and other cryptocurrencies faced challenges due to intensified global economic tensions. Despite a strong start fueled by optimism surrounding President Trump’s return, the market experienced a significant drop in trading volumes.
Crypto Q1 Volume and Liquidity Performance
- Bitcoin fell over 25% from its January peak, ending the quarter down approximately 12%.
- Ethereum and major altcoins also declined, with AI and memecoins averaging losses above 50%.
- Weekly trading volumes for BTC, ETH, and other major tokens averaged $266 billion, a decrease of 30% compared to late 2024.
- U.S.-based exchanges like Coinbase and Kraken maintained strong market depth, representing 60% of Bitcoin's liquidity.
- Altcoin volatility reached multi-year highs; Bitcoin’s volatility increased from 34% in February to 51% in March.
The Path Ahead: Outlook For Q2
- Kaiko analysts suggest potential opportunities in Q2 following a 90-day delay on tariff implementation by the White House, which has sparked a short-term rally.
- Growth in the stablecoin market, pending ETF approvals, and pro-crypto regulatory changes could support recovery.
- The stablecoin sector has expanded by 33% since late 2024, now exceeding $230 billion in supply, often leading to broader crypto rallies.
- Over 40 crypto-related ETF applications are pending, increasing the potential for institutional participation.
- If volatility decreases and regulatory clarity improves, Q2 may lead to a positive shift in sentiment, particularly for Bitcoin.
