CoinGecko's quarterly report revealed that the cryptocurrency market cap dropped by 18.6% in the first quarter of 2025. Additionally, trading volume on centralized exchanges decreased by 16% compared to the previous quarter.
Despite a few positive trends identified in the report, many of them were accompanied by significant drawbacks. The beginning of the year saw market euphoria, but concerns about a potential recession have had a severe impact.
The report highlights the bearish trend that dominated the crypto market in the first quarter, with macroeconomic factors influencing sentiment negatively over the past months.
In Q1 2025, the total market cap of cryptocurrencies witnessed a significant decline of 18.6%, equivalent to $633.5 billion. Investor activity decreased as token prices dropped, with daily trading volumes declining by 27.3% from the end of 2024. The report attributes a 16.3% decrease in spot trading volume on centralized exchanges in part to the Bybit hack.
Although specific events, such as Trump's inauguration and the TRUMP meme coin, initially boosted market sentiment, subsequent developments like the LIBRA scandal had adverse effects.
Bitcoin's market dominance increased to 59.1% in Q1 2025, surpassing its share since 2021. However, despite this dominance, Bitcoin's value fell by 11.8% and was outperformed by gold and US Treasury bonds.
The report also highlights the challenges facing other cryptocurrencies, with Ethereum losing its 2024 gains in Q1 2025, and the multichain DeFi total value locked (TVL) dropping by 27.5%. Various other sectors in the cryptocurrency market experienced similar declines.
Although some positive developments were noted, each was tempered by significant drawbacks. For instance, while Solana excelled in decentralized exchange trade, its TVL decreased by more than 20%. Bitcoin ETFs attracted $1 billion in new investments, but the total assets under management (AUM) decreased by nearly $9 billion due to price fluctuations. Overall, recession fears continue to influence the crypto market.