Despite a weak Q1 for cryptocurrencies, analysts identify potential factors for recovery in Q2, including rising global money supply, pro-regulatory changes in the US, increasing stablecoin assets and geopolitical chaos compelling investor portfolio reassessments. Predictions suggest significant future price increases for Bitcoin, with Coinbase remaining optimistic about the second half of 2025.
The cryptocurrency market has experienced its weakest Q1 performance in years, prompting analysts to identify potential catalysts for Q2 recovery. Matt Hougan, chief investment officer of Bitwise, described the previous quarter as the “best worst quarter in crypto’s history,” highlighting a need for improvement in the sector.
In Q1 2025, significant declines were recorded for Bitcoin (BTC) and Ether (ETH), with losses of 11.82% and 45.41%, respectively. Historically, Q1 has been a strong quarter for Bitcoin, averaging a 51.2% increase since 2013, while Ether’s performance has averaged 77.4%.
Key catalysts for potential market turnaround include the anticipated increase in global money supply. Central banks worldwide signify a shift toward monetary easing and M2 expansion, conditions that typically benefit risk assets like cryptocurrencies. Analyst Pav Hundal notes that such global loosening measures are reliable indicators for crypto growth.
Additionally, Hougan reported a clean sweep of pro-regulatory developments in the United States, suggesting that enhanced regulatory clarity could positively impact the crypto market. He emphasised that this trend is just beginning to emerge.
The rise in stablecoin assets, which reached an all-time high of over $218 million during Q1, is another promising factor. This increase in stablecoin use could positively influence ancillary sectors, such as DeFi.
Hougan also pointed to geopolitical turbulence in early 2025, particularly linked to economic policies and tariffs, forcing global investors to reconsider their asset allocations. Following these trends, he predicted a possible Bitcoin surge of 138%, aiming for a year-end valuation of $200,000.
Coinbase has indicated that when market sentiment shifts, it could happen swiftly, maintaining a positive outlook for the latter half of 2025. However, caution is advised as all investments carry inherent risks, and readers should conduct thorough research before making financial decisions.
