Bitcoin and Ethereum Record Woeful Q1

Despite investor hopes coming into the new year, at the time of writing on March 30, Bitcoin and Ethereum are down 11.95% and 45.06%, respectively, in Q1.

Cryptocurrency market behemoths Bitcoin and Ethereum are displaying a troubling trend—they're poised to close Q1 with their worst performance in seven years. This bleak outlook follows a year of rapidly shifting global macroeconomic and geopolitical dynamics that have sparked uncertainty and left risk assets subdued.

What Happened: Despite investor hopes coming into the new year, Bitcoin and Ethereum are down 11.95% and 45.06%, respectively, at the time of writing on Friday. With only a few hours to go to the end of the quarter, these leading cryptocurrency assets are on track for their worst quarterly close since 2018.

The first sign of trouble was the Federal Reserve's hawkish pivot in December, when it cut its interest rate cut projections for 2025, arguing that it expected inflation to remain sticky.

President Donald Trump's erratic tariff policy has further complicated the situation, worsening inflation fears and sparking economic growth concerns.

However, despite these overarching concerns, cryptocurrency market participants are holding out hope for a turnaround in Q2, and history may be on their side.

Historical Data: Seven out of 12 times, Bitcoin has closed the second quarter of the year in the green, averaging 27% gains. The numbers are even more impressive for Ethereum.

Seven out of nine times, the second-largest cryptocurrency asset by market cap has ended the second quarter in the green with an average gain of 67%, typically outperforming Bitcoin within the period.

Some market observers are hopeful for a turnaround in Q2 in anticipation of a near Fed pivot. Following the last Federal Open Market Committee meeting, Federal Reserve Chair Jerome Powell asserted that inflation may be transitory. At the same time, he let slip that the Fed will be taking steps to slow down quantitative tightening starting April 1.

"JAYPOW delivered, QT basically over Apr 1. The next thing we need to get bulled up for realz is either SLR exemption and or a restart of QE. Was $BTC $77k the bottom, prob. But stonks prob have more pain left to fully convert Jay to team Trump so stay nimble and cashed up," BitMEX founder Arthur Hayes said.

Market Impact: In the short term, several events will be affecting the crypto market. Several data releases, such as data on U.S. manufacturing activity and the monthly jobs report, are anticipated this week. At the same time, Trump is expected to announce fresh tariffs on April 2, which he has said will target all countries.

"The US leads a busy week ‘look ahead’ for the global economy and markets with a string of data releases — including the monthly jobs reports, JOLTS, ISM, and retail sales — the April 2nd tariff announcement, and remarks by Chair Powell and other Federal Reserve officials. We’ll also keep an eye out for any further developments in the U.S. debt ceiling talks and the tone of the Chinese economic reports."

Ahead of these events, Bitcoin and Ethereum are trading at monthly lows of around $83,000 and $1,800, respectively.