Worst crypto slump amid historic achievements in Q1
02.05.2025
The first quarter of 2025 turned out to be a paradox for the cryptocurrency industry. In a recent report by asset manager Bitwise, the period is described as “the best of the worst” in crypto market history. Despite unprecedented positive developments, the market experienced a deep downturn.According to Bitwise CIO Matt Hougan, the crypto community had been waiting years for these changes — and they finally happened. A U.S. president supportive of digital assets took office, a Bitcoin reserve was created, and the SEC withdrew most of its lawsuits. The aggressive regulatory era can now be considered over.One would expect cryptocurrency prices to soar under such conditions. However, the reality was different. Bitwise’s index of top digital assets dropped by nearly 20%. Crypto-related stocks fell even more, and Ethereum lost nearly half its value. The market's total capitalization shrank by about 20% over three months, with losses continuing into April. Since the January peak of $3.9 trillion, the crypto market has contracted by one-third.Still, the report notes that even in a declining market, it’s essential to look for signals of future growth. Stablecoins set new records — with over $218 billion in volume and a market cap reaching $236 billion, second only to Bitcoin. Transaction volume also saw a notable increase.The tokenized asset sector grew by 37%, and Bitcoin futures saw record institutional interest, signaling growing trust in crypto. At the same time, the industry faced setbacks: a $1.5 billion hack of Bybit and the collapse of meme coins caused significant losses for investors.