Bitcoin and other crypto assets faced headwinds in the first quarter of 2025 as global economic tensions intensified. After a strong start to the year driven by optimism over President Donald Trump\u2019s return and supportive macroeconomic expectations, the crypto market struggled with a sharp drop in trading volumes.<\/p>\n
According to a new report<\/a> by Kaiko, the tariff measures introduced by the Trump administration<\/a> contributed to increased volatility and risk-off behavior among market participants.<\/p>\n Bitcoin, which had rallied to new highs in January, has now fallen by over 25% from its peak, ending the quarter down approximately 12%. Ethereum and the top altcoins also saw declines, with AI and memecoins posting average losses above 50%.<\/p>\n Weekly volumes for BTC, ETH, and other major tokens averaged $266 billion, down 30% from levels seen in late 2024. Kaiko attributed much of the decline to offshore exchange activity falling and traders pulling back due to rapid market swings and uncertainty.<\/p>\n U.S.-based exchanges maintained strong market depth despite broader selloffs, buffering the impact on Bitcoin\u2019s liquidity. Platforms like Coinbase, Kraken, and CEX.IO collectively comprised 60% of BTC\u2019s market depth in Q1.<\/p>\n This allowed BTC to outperform many altcoins, which suffered from both reduced demand and thinner liquidity. Kaiko noted that this environment favored larger-cap assets<\/a> and further highlighted the resilience of BTC compared to other riskier assets in the crypto space. The report noted:<\/p>\n Altcoin volatility surged in early 2025, reaching multi-year or all-time highs for certain tokens, notably Cardano\u2019s ADA. Bitcoin\u2019s volatility also rose, from 34% in February to 51% in March, though it stayed below the peaks observed during last August\u2019s carry trade unwinding. The growing volatility gap between Bitcoin and altcoins may discourage risk-averse traders from entering the market in the near future.<\/p>\n Looking forward, Kaiko analysts believe the second quarter could offer renewed opportunities<\/a>. The White House\u2019s recent decision to delay tariff implementation by 90 days has already sparked a short-term rally, suggesting sensitivity to macroeconomic developments remains high.<\/p>\nCrypto Q1 Volume and Liquidity Performance<\/h2>\n
The Path Ahead: Outlook For Q2<\/h2>\n