James Richardson
Bitcoin is on track for its worst first-quarter performance in five years, driven by macroeconomic uncertainty and Trump’s tariff policies. The leading cryptocurrency has declined over 7% in Q1 2025, making it the weakest first-quarter return since 2020’s 11% drop, according to CoinGlass data.
After starting the year on a high note and reaching a record $108,786 in January, optimism faded when Donald Trump assumed office on January 20. His administration’s economic tariffs dampened market sentiment, pushing Bitcoin to a low of $76,700 on some exchanges—a 30% correction from its peak.
Despite the recent pullback, analysts believe Bitcoin could stage a strong recovery in the second quarter, fueled by monetary easing and policy shifts.
Sina G., co-founder of 21st Capital, pointed out that most negative market factors have already been priced in. He expects the resolution of uncertainty surrounding tariffs and government spending within the next quarter, which could shift attention to tax cuts, deregulation, and Federal Reserve rate cuts—all of which may drive fresh capital into Bitcoin and digital assets.
A similar outlook was shared by Aurelie Barthere, Principal Research Analyst at Nansen, who believes the worst of the tariff uncertainty may be behind us. She cited a more pragmatic approach from U.S. Treasury Secretary Bessent, who has signaled that a negotiated reduction in trade barriers could be on the horizon.
With Trump’s reciprocal tariff announcement expected on April 2, short-term volatility remains a possibility. However, Nansen’s research team anticipates post-announcement price swings, particularly if negotiations between the U.S. and the Eurozone introduce further market adjustments.
Historical Trends and Q2 Growth Potential
While Bitcoin’s near-term trajectory remains uncertain, historical data suggests a bullish outlook for Q2. Over the past 13 years, Bitcoin has posted gains in at least 7 second quarters, with an average return of 27%.
Market sentiment may also get a boost from the U.S. government’s potential Bitcoin reserve plans and stablecoin regulations. At the Digital Asset Summit 2025, Bo Hines, Executive Director of the Presidential Working Group on Digital Assets, indicated that stablecoin regulations could be finalized by June, potentially increasing market liquidity and institutional adoption.
Meanwhile, Standard Chartered has projected a $500,000 Bitcoin price target, citing the anticipated national Bitcoin reserve initiative as a key driver of long-term growth.
Long-Term Outlook: A Transformational Shift in Crypto
Despite Q1 turbulence, some analysts view the price action as a short-term fluctuation within a larger financial transformation.
Rushi Manche, co-founder of Movement Labs, remains optimistic about Bitcoin’s trajectory, arguing that a policy pivot from the Federal Reserve could unlock significant capital for crypto markets.
“The first 100 days of an administration set the foundation—but the real impact comes when policy finally aligns with technological advancements,” Manche told The Block.
With key economic policies set to unfold in Q2, many experts believe Bitcoin is well-positioned for a resurgence in the coming months.
