Bitcoin notched in its worst first quarter of a decade, falling 11.7% as markets struggled to understand the new administration’s economic agenda.
Performance ranked 12th out of the last 15 quarters, according to data from NYDIG Research.
Drawdowns invite questions familiar to cryptography circles: Is the cycle over? According to Nydig, the last year that Bitcoin began an inadequate year during its long slump after its peak in 2013 was 2015. At the time, prices recovered modestly for the rest of the year before surged in 2016.
In the first quarter of 2020, amid a sale of markets related to the fear surrounding the Covid-19 pandemic, BTC saw a drawdown of 9.4%, but then recovered to end the year. In other years with negative first quarter returns, such as 2014, 2018 and 2022, Vitocoin suddenly ended the year, matching the tail edge of the previous Bull Cycle, the research notes said.
This time, the background is vague. Cryptocurrency prices skyrocketed after Donald Trump won the US election in November after he launched a procryption campaign. Under the Trump administration, the sector has gained greater regulatory clarity, and the Securities and Exchange Commission (SEC) supports many lawsuits against crypto companies, but that’s not all bullish.
Last week, Trump announced mutual tariffs on almost every country around the world, significantly declaring a $5.4 trillion wipeout of the US stock market in just two days. This led to the entry into the territory of the Nasdaq 100, the lowest level of the S&P 500 index, in 11 months. Bitcoin has outperformed so far, but it is unclear what will happen after Monday’s opening bell.
Historically, weak Q1 does not always spell Doom in BTC, Nydig data shows. The assets bounced back half of the year that began with red. In the recent macroeconomic context, analysts have been able to test BTC’s role as a “US quarantine hedge” that has caused the odds of a recession. Read more: Chart of the Week: Will April bring good fortune or will fools bring hope to Bitcoin?