As Q2 2025 concludes, Bitcoin (BTC) has recorded its highest quarterly returns since Q2 2020. Expectations for Federal Reserve rate cuts and rising M2 money supply have sparked optimism that this positive momentum could extend into Q3.
However, Bitcoin’s upward trajectory could face obstacles, such as the potential threat of a trade war and the weight of historical market patterns.
Can Bitcoin Defy Q3’s Historical Slump in 2025?
Coinglass data showed that while Bitcoin experienced a downturn at the start of the year, it had bounced back strongly in Q2. In the second quarter, BTC posted a 29.79% return.
This marked one of its best quarterly performances since Q2 2020 when Bitcoin saw a 42.33% increase.
Bitcoin Quarterly Returns. Source: Coinglass
Furthermore, Bitcoin reached an all-time high (ATH) of over $111,900 in May, driven by favorable macroeconomic factors and rising institutional adoption. Although geopolitical tensions triggered a correction that pulled Bitcoin below $100,000, it remained resilient and recovered most of its losses.
BeInCrypto data showed that at the time of writing, Bitcoin’s trading price was $107,383, reflecting a 3% rise over the past week. With Q2 coming to a close, all eyes are now on how Bitcoin will perform in the next quarter.
Bitcoin Price Performance. Source: BeInCrypto
Historically, Q3 has been Bitcoin’s weakest quarter, with an average return of just 6.03%. Despite this, market watchers have differing opinions on Bitcoin’s potential performance in the coming months.
In a recent X post, analyst Ether Wizz highlighted that Bitcoin’s spot volume is increasing. He pointed out that a similar pattern was observed in Q3 2024, which led to a price rally.
“I think a new ATH for BTC is just a matter of weeks now,” he stated.
On the other hand, Benjamin Cowen, CEO of Into The Cryptoverse, predicts that Bitcoin could hit its next low around August or September. This suggested a more cautious outlook for the coming months.
“Bitcoin would likely start exhibiting some weakness around mid-June as the Q3 weakness starts to present itself. Same thing happened the last couple of years,” Cowen wrote.
Bitcoin Price Prediction in Q3 2025. Source: X/BenjaminCowen 3 Macroeconomic Forces That Could Determine Bitcoin’s Q3 Fate
As Bitcoin’s prospects remain debatable, several upcoming macroeconomic events and factors could influence its trajectory in Q3 2025. The first key event is the anticipated Federal Reserve rate cut.
According to CME FedWatch data, while only 20.7% of market participants expect the Federal Reserve to cut interest rates in July, the probability sits at 90.3% in September.
Possibility of a Fed Rate Cut in September. Source: CME
This sharp shift in expectations reflects growing confidence that the Fed will ease monetary policy in Q3. It could be a significant bullish driver for crypto markets, including Bitcoin.
Additionally, the M2 money supply is expected to continue rising in Q3. According to analyst Cas Abbé, the People’s Bank of China injected 1.5 trillion yuan into the economy through reverse repo operations this week.
This move, part of broader efforts to stimulate economic growth, could lead to more market liquidity. This, in turn, can drive demand for assets like Bitcoin as investors seek alternatives amidst an expanding money supply.
“And the biggest reason behind this is DXY dump, which gives freedom to others countries to print more without worrying about currency devaluation. All of this is pushing global M2 supply to new highs, which means BTC pump will be even bigger. $130K-$140K BTC in Q3 is coming,” Abbé added.
Meanwhile, the rising US debt also positions BTC as an attractive hedge. It could draw institutional and retail interest as investors seek alternatives to traditional assets amid growing financial uncertainty.
However, a significant counterforce looms with the expiration of Trump’s 90-day tariff freeze.
“President Trump’s 90-day tariff pause now only has 13 days remaining. This means without any new trade deals, on July 9th, tariff rates will rise as follows: 1. Country-specific “reciprocal tariffs” return, 2. Tariffs of up to 50% on EU imports, 3. 30% tariffs on Chinese imports remain in effect 4. Global 10% baseline tariffs remains in effect,” The Kobeissi Letter posted.
The potential return of a trade war could introduce volatility, historically a challenge for Bitcoin. Past trade tensions have led to sharp price corrections. Thus, a renewed trade war narrative in Q3 could likely undermine the positive effects of rate cuts and money supply growth.
