{"id":4166,"date":"2025-04-11T18:13:11","date_gmt":"2025-04-11T18:13:11","guid":{"rendered":"https:\/\/coinsvalue.net\/blog\/kaiko-report-highlights-key-drivers-of-q1-crypto-market-decline-and-outlook-for-q2\/"},"modified":"2025-04-11T18:13:11","modified_gmt":"2025-04-11T18:13:11","slug":"kaiko-report-highlights-key-drivers-of-q1-crypto-market-decline-and-outlook-for-q2","status":"publish","type":"post","link":"https:\/\/coinsvalue.net\/blog\/kaiko-report-highlights-key-drivers-of-q1-crypto-market-decline-and-outlook-for-q2\/","title":{"rendered":"Kaiko Report Highlights Key Drivers of Q1 Crypto Market Decline and Outlook for Q2"},"content":{"rendered":"

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 tariff measures introduced by the Trump administration contributed to increased volatility and risk-off behavior among market participants.<\/p>\n

Crypto Q1 Volume and Liquidity Performance<\/h2>\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’s 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 and further highlighted the resilience of BTC compared to other riskier assets in the crypto space. The report noted:<\/p>\n

\n

Altcoin volatility surged in early 2025, reaching multi-year or all-time highs for certain tokens, notably Cardano’s ADA. Bitcoin’s volatility also rose, from 34% in February to 51% in March, though it stayed below the peaks observed during last August’s 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<\/blockquote>\n

The Path Ahead: Outlook For Q2<\/h2>\n

Looking forward, Kaiko analysts believe the second quarter could offer renewed opportunities. 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>\n

More importantly, structural tailwinds are building: the expansion of the stablecoin market, pending ETF approvals for altcoins, and the appointment of pro-crypto SEC Chair Paul Atkins could all support a recovery<\/p>\n

In addition, the stablecoin sector, led by USDT and USDC, has grown 33% since late 2024, now exceeding $230 billion in supply. Historical data from Kaiko suggests that expansions in stablecoin supply often precede broader crypto rallies.<\/p>\n

With over 40 crypto-related ETF applications pending review and two stablecoin bills gaining momentum in Congress, the potential for renewed institutional participation is rising.<\/p>\n

Kaiko\u2019s report concluded that if market volatility subsides and regulatory clarity improves, Q2 may mark a shift in sentiment. While risks remain from geopolitical tensions and economic policies, the combination of macro catalysts and maturing infrastructure may pave the way for renewed growth, particularly for Bitcoin.<\/p>\n

\"Bitcoin<\/p>\n

Featured image created with DALL-E, Chart from TradingView<\/p>\n","protected":false},"excerpt":{"rendered":"

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. According to a new tariff measures introduced…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[56,181,84,55,61,62,85,2244],"class_list":["post-4166","post","type-post","status-publish","format-standard","hentry","category-bitcoin-news","tag-bitcoin","tag-bitcoin-analysis","tag-bitcoin-market","tag-bitcoin-news","tag-btc","tag-btcusdt","tag-crypto-market","tag-kaiko"],"_links":{"self":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/4166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/comments?post=4166"}],"version-history":[{"count":0,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/posts\/4166\/revisions"}],"wp:attachment":[{"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/media?parent=4166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/categories?post=4166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinsvalue.net\/blog\/wp-json\/wp\/v2\/tags?post=4166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}