The first quarter of 2025 saw significant volatility in the cryptocurrency market, with total market capitalization declining by 18.6% to $2.8T after reaching a year-to-date high of $3.8T in January, according to the Q1 2025 Crypto Industry Summary report by CoinGecko.
This downward trend coincided with Donald Trump’s administration and its trade policies. Bitcoin briefly reached a new all-time high of $106,182 on January 22, but subsequently fell 11.8% over the quarter to close at $82,514, outperforming many altcoins. Ethereum suffered a dramatic 45.3% decline, erasing all its 2024 gains and falling to $1,805.
Altcoins Mixed During Crypto Winter
Bitcoin’s dominance continued to strengthen, climbing 4.6 percentage points to 59.1% of total market cap—levels not seen since Q1 2021. Meanwhile, Ethereum’s dominance fell to 7.9%, its lowest share since late 2019. Stablecoins benefited from market uncertainty, with their collective market cap reaching a new all-time high of $226.1B, up $24.5B during the quarter.
Gold emerged as the strongest performing asset class in Q1 (+18%), while risk assets like BTC (-11.8%) and NASDAQ (-10.3%) declined. This reflected investors’ flight to safe-haven assets amid growing trade war concerns. US Spot Bitcoin ETFs experienced net inflows of $1.0B during Q1, though total assets under management fell to $98.7B due to Bitcoin’s price decline.
Sector Performance And Exchange Activity
Solana dominated DEX trading in early 2025, accounting for 52% of on-chain trades among top blockchains in January, pushing Ethereum’s market share below 20% for the first time. However, as memecoin hype faded, Ethereum reclaimed the top spot by March.
The memecoin sector suffered a significant blow following the $LIBRA fiasco, where a token promoted by Argentine president Javier Milei collapsed from a $4.6B market cap to $221M in hours.
Trading volumes on top centralized exchanges (CEXes) declined by 16.3% quarter-over-quarter to $5.4T, with Binance’s market share climbing to 40.7%. Bybit saw volumes plummet after experiencing a $1.4B hack in February. In contrast, decentralized exchanges (DEXes) saw modest growth of 6.2% to $700.7B, with Meteora experiencing the most significant gain (+164.9%).
NFT trading volume fell 38.2% from December to March, with Ethereum-based NFTs hit hardest as volumes on the network plunged 85.2%. Bitcoin NFTs surpassed Ethereum in March, jumping 3.7x to $547M, primarily driven by multiple Bitcoin Ordinals mints on Magic Eden.
The quarter also witnessed significant shifts in the perpetual futures market. While trading volume on the top 10 perpetual DEXes grew by 39.6% to $799.2B, setting another all-time high quarter, the perpetual CEXes market experienced a slight decline of 7.1% to $19.7T.
Hyperliquid emerged as the dominant player among DEXes, capturing 68.8% of market share with $549.8B in volume, making it the 8th largest perpetual exchange across both centralized and decentralized platforms. Open interest on perpetual exchanges decreased significantly across both CEXes (-32.7%) and DEXes (-21.1%), reflecting the broader market downturn and shift toward more cautious positioning by traders.
DeFi market capitalization tumbled by 19.3% to $96B, though it maintained its share of the overall market at 3.5%. The Real-World Assets (RWA) sector showed resilience, outperforming other segments with a 12.7% increase in total value locked. Notable developments included BlackRock’s USD Institutional Digital Liquidity Fund reaching $1B in TVL, and Donald Trump’s World Liberty Financial announcing a dollar-pegged stablecoin called USD1.
The quarter was marked by several significant events, including Trump’s executive order on Digital Assets, Bybit’s record-breaking $1.4B hack, the SEC dropping its lawsuit appeal against XRP, and the launches of several new Layer-1 blockchains including Berachain, Abstract chain, and Ondo Chain.