The crypto market entered 2025 on the right foot with bullish momentum dominating the market in January. But, as recession fears and unfavorable macroeconomic factors prevailed, the market has since faced a downturn. The recent quarterly report by Coingecko paints a grim picture of 2025’s Q1.
Notably, the total crypto market cap (TOTAL) lost $633.5 billion dropping to $2.8 trillion at the end of the first quarter. This drop marks a 18.6% dip from the fourth quarter (Q4) of 2025. Additionally, investor activity also plunged as depicted by the dip of trading volume on centralized exchanges.
$633.5B Wiped Out of Crypto Market in Q1 2025
According to the 2025 Q1 Crypto Industry Report by Coingecko, the crypto market ended the first quarter of 2025 with a significant downturn. Despite facing bullish momentum in January, which saw the total market cap reach $3.8 trillion on January 18, it dropped to $2.8 trillion at the end of March.
As per the CoinGecko report, the total crypto market cap dropped by $633.5 billion between January and March 2025. This is a staggering 18.6% drop and resulted from recession fears caused by the ongoing trade tariff war.
During this period, investor confidence also fell in tandem with the crashing market. The daily trading volume dipped sharply by 27.3% quarter-on-quarter (QoQ) to $146.0 billion. This marks a sharp decline from Q4 of 2024 which recorded an average of $200.7 billion.
Furthermore, Spot trading volume on centralized exchanges (CEXs) also dipped to $5.4 trillion, a staggering 16.3% dip quarter-on-quarter. CoinGecko partially attributed the dip in Spot trading volume on CEXs to the $1.5 billion ByBit hack which rattled investor confidence.
“After suffering a major hack in February, Bybit had the largest month-on-month (MoM) drop. It fell by -52.4% MoM from $178.2 billion to $84.7 billion.” the report noted.
BTC’s Dominance Rose in Q1 as Altcoins Suffered
The Q1 report by CoinGecko further shows that the dominance of Bitcoin (BTC) rose as altcoins suffered losses amidst tariff uncertainty. BTC’s dominance (BTC.D) increased by 59.1%—a level that was last experienced in early 2021. BTC reached a new all-time high at $106,182 but dropped since then ending Q1 at $82,514.
Following the dip, Bitcoin was outperformed by Gold in 2025 Q1. Gold surged by 18.0% in that period, positioning itself as the strongest asset in the first quarter of 2025. However, other risk assets including NASDAQ and SP500, dipped by 10.3% and 4.4%, respectively.
On the other hand, Ethereum (ETH) saw a sharp reversal in fortunes. The top altcoin by market cap fell by 45.3% dipping from $3,336 to $1,805. This significant drop wiped out all of its 2024 gains. Additionally, the trading volumes also declined with the daily average volume dropping from $30.0 billion in Q4 2024 to $24.4 billion in Q1 2025.
Q1’s Positive Trends Came With Major Drawbacks
2025’s Q1 was full of new trends that sparked huge hope in the market. For instance, the TRUMP meme coin re-introduced the meme coin frenzy on the Solana blockchain. However, the excitement faded away quickly. The LIBRA rug-pull dampened investors’ confidence.
As investors flee from the memecoin market, Bitcoin’s increasing market dominance seemed beneficial as it offered investors a steady haven at the moment. Investors sought after BTC as their safer crypto investment option.
Even so, Bitcoin which had managed to draw investment capital and trading volume suffered from the tariff-induced market downturn. This downturn has continued in the 2025 Q2 as the crypto market faces extreme volatility as uncertainty looms.
The upcoming crypto market performance will depend on the industry’s capability to handle external pressure. Retail and institutional participants must thus be cautious until the market improves.
