The cryptocurrency market has just experienced a turbulent Q1/2025, starting with high hopes from Donald Trump's inauguration as President of the United States, but ending in "tears" as major coins like Bitcoin and Ethereum suffered unprecedented deep declines in many years. With pressure from upcoming tariffs and pessimistic sentiment, can the crypto market recover, or will it continue to sink into crisis?
Q1/2025: "Disaster" for Bitcoin and Ethereum
The crypto market enters 2025 with great hopes due to Trump’s crypto-friendly policies, but the reality is harsh. Bitcoin ($BTC ) ended March down 2.56%, confirming a downward trend. For the quarter, BTC lost 12% of its value – the worst Q1 since 2018 and the largest quarterly decline since the FTX collapse at the end of 2022. From a peak of $109,000 on Trump’s inauguration day (20/01), BTC is now only $84,900 (01/04), down 22%, according to CoinGecko.
Ethereum (ETH) fared even worse, dropping 18.87% in March and 45.53% for the quarter – also the worst quarter since 2018. The ETH/BTC exchange rate hit its lowest point since 2020, reflecting investors' pessimistic sentiment. $ETH is currently trading at $1,917, sharply down from earlier highs. The decline in ETH is not only due to the overall market but also due to a lack of technological breakthroughs and weakened protocol activity, shaking confidence in the "king of DeFi."
Total market capitalization of crypto has decreased by 11.65% since the beginning of the year, down to $2.88 trillion (28/03), according to #CoinMarketCap . Other altcoins have not fared better, being swept along by the decline of the two "giants."
Causes: Industry Events and Geopolitics
Q1/2025 witnessed many events negatively impacting the crypto market:
Price drop and weakened FOMO sentiment: After a strong post-election Trump rally, investors began to take profits, leading to significant selling pressure. Bitcoin dropped from $109,000 to $84,900, while ETH lost nearly half its value.
Lack of technological breakthroughs: Ethereum, despite having transitioned to Proof-of-Stake since 2022, did not see significant improvements this quarter. Layer-2 solutions like Arbitrum and Optimism have not been enough to restore confidence, while Solana (SOL ~150 USD) was also affected by memecoins (losing 50% liquidity due to TRUMP).
Geopolitical pressure: Tariff policies of $TRUMP expected to be announced on 02/04 raise concerns about a trade war. U.S. economic indicators worsen – March PMI rises at the fastest rate since mid-2022, factory activity contracts, and consumer confidence hits a four-year low – sparking fears of stagflation.
Crypto, once considered "digital gold," now fluctuates in tandem with stocks (Nasdaq +0.87%, S&P 500 +0.38% on 01/04), losing its label as a "safe-haven asset." Meanwhile, gold continues to reach new highs, benefiting from safety-seeking sentiment.
Impact of Trump's Tariffs
On 02/04, #TRUMP will announce tariffs at the White House, effective immediately. Although investors are optimistic that tariffs will be lighter than expected (Bitcoin up 2.5% on 01/04), analysts remain concerned. Sid Powell (CEO of Maple) warns: "Risk assets like crypto could suffer if tariffs increase the USD value or slow global growth." Pedro Lapenta (Hashdex) believes the market should "stay on the sidelines" waiting for clarity, predicting continued volatility.
Joe DiPasquale (BitBull Capital) noted that the slight recovery on 01/04 was due to expectations of targeted tariffs, but "the situation remains unclear, investor sentiment may change when the details are announced."
Bitcoin Price Forecast for April 2025
Based on current data and trends, Bitcoin may continue to face pressure in April:
Bearish scenario: If Trump's tariffs exceed expectations, causing a trade war and stagflation, Bitcoin could drop further. With a 12% decline in Q1 and cautious sentiment, BTC could hit a bottom of $75,000 – a key support level (down 11.5% from $84,900). Polymarket once predicted a 61% chance of BTC reaching $110,000 this year, but currently, pessimistic sentiment prevails.
Bullish scenario: If tariffs are light and FOMO sentiment returns, BTC could recover to $90,000. Analysts like Chris Kline (BitcoinIRA) believe that "the peak will come by the end of 2025," with an average forecast of $121,440 (Changelly).
Conclusion: Crypto Before the "New Storm"
Q1/2025 is a "nightmare" for the crypto market: Bitcoin down 12%, Ethereum plummeting 45%, and investor sentiment is pessimistic. Trump's tariffs on 02/04 could be the next "blow," pushing crypto into a vortex of volatility. The lowest predicted price for Bitcoin in April is $75,000 if a bad scenario occurs. Can crypto regain its title as "digital gold," or will it continue to sink into crisis? As "Liberation Day" approaches, the market holds its breath in anticipation.
Risk warning: Investing in crypto carries high risks due to price volatility and macroeconomic instability (Trump's tariffs). Please consider carefully before participating.