Bitcoin (BTC) experienced a tumultuous Q1 2025, facing a sharp decline following the White House’s press briefing on tariff hikes. The announcement of 104% tariffs on China led to immediate market reactions, affecting cryptocurrencies and equities alike. Bitcoin’s correlation with traditional assets has also become more pronounced in recent months. This article highlights Monovex‘s expert perspective on the topic.
While historically, the correlation between Bitcoin and gold was negative, recent data from The Block reveals a growing positive correlation with stock indices like the S&P 500 and the Nasdaq Composite.
Bitcoin saw a significant price drop in Q1 2025, shedding 11.7% from its value, marking one of its worst performances in recent years. The leading cryptocurrency, which had enjoyed substantial gains over the previous six months, struggled to maintain momentum. As of now, BTC hovers around $77,000, despite losing 18% year-to-date.
Despite these setbacks, Bitcoin’s performance in the quarter was not without hope. The US administration’s pro-crypto stance acted as a buffer, with Bitcoin managing to recover from each drawdown, even if it could not maintain gains.
The anticipated Bitcoin Strategic Reserve and plans for further government involvement in the crypto sector failed to keep prices elevated. As Bitcoin’s price fluctuates, analysts believe the bull market is still intact, with eyes on key support levels like $74,500.
XRP Struggles Amid SEC Developments
XRP, the native token of the Ripple network, showed minimal movement in Q1 2025, with the coin gaining just 0.4% over the period. While the Securities and Exchange Commission (SEC) ended its prolonged legal battle against Ripple by reducing the fine from $125 million to $50 million, the market’s reaction was tepid.
Ripple’s moves, including the expansion of its stablecoin project RLUSD and US-based partnerships, didn’t spark the momentum needed to drive XRP’s price upward.
Despite being cleared of some of the legal uncertainties, XRP’s performance continued to underwhelm, trading at around $1.82 at the close of Q1. While Ripple CEO Brad Garlinghouse’s commitment to expanding the US as a “crypto capital” could bode well for future growth, but the lack of demand from larger institutional investors weighed heavily on XRP.
Ethereum Faces a Hard Fall in Q1 2025
Ethereum (ETH) had a particularly tough quarter, losing over 45% of its value. This significant drop pushed ETH to its lowest level since November 2023, and it reached a cycle low of $1,411 during the broader market selloff. Ethereum’s decline was attributed to several factors.
A lack of institutional interest in Ethereum’s potential ETF, coupled with growing value capture by DeFi protocols and Layer 2 solutions, hurt its price. DeFi ecosystems and Layer 2 chains that rely on Ethereum’s security infrastructure gained market share, eroding the demand for ETH itself.
Ethereum’s price struggles were exacerbated by the Ethereum Foundation’s decision to sell off a portion of its holdings, dampening sentiment among investors. Ethereum could not hold key support levels, and its price stagnated, with it trading at $1,462 as of writing. The loss of interest from both retail and institutional traders left Ethereum vulnerable to the broader market pullback.
ETF Developments: Solana’s Promising Future
While Bitcoin, Ethereum, and XRP struggled in Q1 2025, there was a notable development for altcoins. Analysts at NYDIG focused attention on the growing interest in altcoins such as Solana (SOL).
The ProShares Solana ETF, which could potentially be deemed effective on April 16, 2025, holds CME Solana Futures and could mark a turning point for Solana’s price in the coming months.
The potential approval of the Solana ETF could catalyze further growth in the Solana ecosystem. In particular, the ongoing rivalry between Pump.fun and Raydium, which are both working to capture market share and trading volume, has helped increase the network’s revenue and adoption. If the ETF comes to fruition, the Solana ecosystem may continue to build on its recent gains, potentially supporting price growth in Q2 2025.
The Good, the Bad, and the Ugly: A Broader Perspective
Q1 2025 proved to be a challenging period for many leading cryptocurrencies, with Bitcoin, Ethereum, and XRP all facing corrections. The economic climate, punctuated by rising global uncertainty and the impact of US-China trade tensions, led to significant sell-offs across the market.
Bitcoin’s price decline, although sharp, is not yet an indication of a long-term downturn. Analysts remain optimistic that Bitcoin’s bull market is far from over, and the asset could recover as the global economy stabilizes. However, the future remains uncertain, particularly as US tariffs and other geopolitical factors continue to weigh on investor sentiment.
Ethereum and XRP’s performance was less optimistic, with Ethereum suffering a steep decline and XRP struggling despite favorable legal news. Both assets failed to spark the interest needed to reclaim lost ground, but with the rise of DeFi and Layer 2 solutions for Ethereum and potential future developments for XRP, there remains hope for recovery.
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