Bitcoin and other cryptographic assets were faced with winds contrary to the first quarter of 2025 while global economic tensions intensified. After a strong beginning of the year led by the optimism on the performance of President Donald Trump and macroeconomic support expectations, the cryptography market fought with a sharp drop in negotiation volumes.
According to a new Kaiko report, the tariff measures introduced by the Trump administration have contributed to an increase in volatility and risk behavior among market players.
Crypto Q1 Liquidity volume and performance
Bitcoin, which had rallied to new heights in January, has now dropped by more than 25% compared to its peak, which ends the quarter down approximately 12%. Ethereum and higher altcoins have also seen declins, with AI and the same with average losses greater than 50%.
The weekly volumes for the BTC, the ETH and other major tokens reached an average of 266 billion dollars, down 30% compared to the levels observed in late 2024. Kaiko awarded a large part of the drop in the drop in offshore exchange activity and merchants pulling due to rapid swings and uncertainty.
American exchanges have maintained a large market depth despite wider sales, buffer the impact on the liquidity of Bitcoin. Platforms like Coinbase, Kraken and Cex.io collectively represented 60% of the depth of the BTC market in the first quarter.
This allowed BTC to surpass many altcoins, which suffered both from reduced demand and thinner liquidity. Kaiko noted that this environment favored assets of greater capitalization and also underlined the resilience of the BTC compared to other more risky assets in cryptographic space. The report noted:
The volatility of Altcoin jumped at the beginning of 2025, reaching multi -year summits or all time for certain tokens, including the Cardano ADA. The volatility of Bitcoin also increased, from 34% in February to 51% in March, although it remained below the peaks observed during the relaxation of the transport trade last August. The growing volatility gap between bitcoin and altcoins could discourage traders opposed to the risk of entering the market in the near future.
The path to come: Outlook for Q2
For the future, Kaiko analysts think that the second quarter could offer renewed opportunities. The recent Decision of the White House to delay the implementation of 90 -day prices has already sparked a short -term rally, which suggests that sensitivity to macroeconomic developments remains high.
More importantly, the structural tail winds are built: the expansion of the Stablescoin market, the ETF approvals awaiting altcoins and the appointment of the President Pro-Crypto dry Paul Atkins could all support a recovery
In addition, the stable sector, led by the USDT and the USDC, has increased by 33% since the end of 2024, now exceeding $ 230 billion in offers. Kaiko’s historical data suggest that extensions in stable supply often precede broader cryptography rallies.
With more than 40 ETF applications linked to the crypto pending examination and two bills on stables, gaining momentum at Congress, the potential for renewed institutional participation increases.
Kaiko’s report concluded that if market volatility adapts and regulatory clarity is improving, T2 could mark a change in feeling. Although the risks remain geopolitical tensions and economic policies, the combination of macro-catalisseurs and matured infrastructure can pave the way for renewed growth, especially for Bitcoin.
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