The first quarter of 2025 has just passed, and Trump's tariff policies have caused turmoil in the global market, with cryptocurrencies not being spared and performing quite poorly. According to CoinGlass data, Bitcoin fell by 11.82% in Q1 this year, while Ethereum plummeted by 45.41%, marking the worst first quarter performance for both coins since 2019.
U.S. stocks remain under pressure, Bitcoin jumps to $85,000
On the 17th, U.S. stocks continued to be under pressure, with investors closely monitoring the latest developments in trade agreements. The four major indices generally performed poorly, with more declines than gains.
The Dow Jones Industrial Average fell by 527.16 points, a decline of 1.33%, closing at 39,142.23 points;
The Nasdaq Composite Index fell by 20.71 points, a decline of 0.13%, closing at 16,286.45 points;
The S&P 500 Index rose slightly by 7 points, an increase of 0.13%, closing at 5,282.7 points;
The Philadelphia Semiconductor Index fell by 24.7 points, a decline of 0.64%, closing at 3,832.47 points.
As for Bitcoin, it briefly fell below $84,000 after the U.S. stock market opened last night, but quickly rebounded and is currently challenging to stabilize at the $85,000 price, showing a relatively robust overall performance.
Bitwise Chief Investment Officer: Four factors may drive cryptocurrency prices up in Q2
Recently, Bitwise's Chief Investment Officer Matt Hougan stated in a market report that although the performance in Q1 this year was somewhat disappointing, he is optimistic about the crypto market in the second quarter of 2025. He mentioned four key factors that may drive up cryptocurrency prices:
1. Increase in global M2 money supply
Hougan stated that central banks around the world are shifting from years of tightening policies to monetary easing, with the M2 money supply (including cash, demand deposits, etc.) continuously expanding. He pointed out, 'Historically, an easing monetary environment is particularly favorable for risk assets, especially digital assets.' For example, the European Central Bank recently cut interest rates again, lowering the deposit rate by 25 basis points to a new low.
As economist Lyn Alden has mentioned, Bitcoin prices have been aligned with the global M2 money supply 83% of the time. Analysts from Australian crypto exchange Swyftx also stated that global monetary easing is usually a precursor to rising cryptocurrency prices. If M2 continues to grow, Bitcoin may see a rebound by the second quarter of 2025.
2. The Trump administration is friendly to cryptocurrencies
Hougan mentioned that the recent trend of 'comprehensive regulatory easing' in the U.S. also favors the crypto market. He believes, 'This is a long-term positive factor, and it has just begun.' Reflecting on the actions of the Trump administration, he announced the establishment of a 'strategic cryptocurrency reserve' that includes Bitcoin, Ethereum, XRP, etc., aiming to make the U.S. the 'global cryptocurrency capital.' Additionally, Trump appointed several key figures who are pro-cryptocurrency, such as Commerce Secretary Howard Lutnick and SEC Chairman Paul Atkins, which shows his support for digital assets. If the U.S. passes stablecoin legislation like the GENIUS Act in the second quarter, it may further drive up Bitcoin prices.
3. Growth in stablecoin supply
The total size of stablecoins surged in the first quarter, reaching a historical high. Hougan stated that this is seen as a positive sign for the rise of the cryptocurrency market. He believes that 'the growth of stablecoins will have a positive impact on decentralized finance (DeFi) and other crypto applications.'
Currently, the U.S. is pushing for stablecoin legislation aimed at providing a clearer regulatory framework. Previously, many analysts believed that once regulation becomes clearer, stablecoins could experience a new wave of growth, which would provide more liquidity to the crypto market, including institutional capital inflow.
4. The impact of Trump's tariff policies on investor behavior
Hougan pointed out that the global economy in the first quarter of 2025 may face 'geopolitical turmoil,' especially due to the tariff policies implemented after Trump's inauguration, which may prompt global investors to reassess their portfolios. He believes that the economic uncertainty caused by tariffs could increase the demand for Bitcoin as a safe-haven asset.
Grayscale's research director Zach Pandl also mentioned that tariffs could undermine the dollar's position, providing more opportunities for non-dollar assets like Bitcoin. Moreover, Michael Saylor, the founder of Strategy, a U.S. listed company with the largest Bitcoin holdings, emphasized that Bitcoin is unaffected by tariffs and is very suitable as a hedge against inflation.
Finally, Hougan reiterated his optimistic forecast, suggesting that Bitcoin could rise approximately 138% from the current $84,080, potentially reaching $200,000 by the end of the year. He stated, 'In December last year, Bitwise predicted that Bitcoin could reach $200,000 by the end of the year, and I still believe this target is achievable.'