Q1 2025 Crypto Market Review

The first quarter of 2025 had a bit of everything. After the excitement that built up in late 2024, the market took a breather, cooling off in Q1 while still pushing forward with some major trends. In this edition of the Crypto Market Monitor, we break down the biggest crypto developments of the year’s first quarter and take a look at where things might be headed going forward.

Q1 wasn’t exactly a standout quarter for crypto prices. With concerns over slowing economic growth and inflation, US equities had a forgettable quarter – the S&P 500 dropped 4.9% while the NASDAQ tumbled 10.27%. Crypto wasn’t spared either. Bitcoin fell 11.82%, Ethereum took a massive 45% hit and Solana ended the quarter down 34%. Altcoins took a harder hit than Bitcoin. Bitcoin dominance started the year at 53.54% and surged to 62.8% by the end of Q1 – a sharp 9.26% increase.

While prices saw a downturn, onchain flows weren’t so bad. Base emerged as the biggest winner of the quarter, pulling in over $3 billion in net inflows. Berachain and Sonic weren’t far behind, both benefiting from the hype around their Mainnet launches in Q1. A major driver behind these gains was the initial wave of yield farming, which tends to bring in rapid liquidity early on.

Solana also had a solid quarter, raking in over $450 million in net inflows, while Ethereum saw the opposite trend, with $1.4 billion in net outflows.

Figure 1: Net flows by chain for Q1 2025

Source: Artemis

Sentiment took a hit in Q1 – something we can conclude by analysing Bitcoin’s net unrealised profit/loss (NUPL) chart. This metric measures the balance between unrealised profits and losses across Bitcoin holders. Simply put, the higher the metric, the more unrealised gains there are on-chain – and the lower it goes, the more losses stack up.

Throughout Q1, NUPL trended downward, hitting a low of 0.446 on March 10. At that point, unrealised losses outweighed unrealised gains by about 24%, reflecting growing investor frustration. It was a clear sign that market participants were feeling the pressure as prices struggled to gain momentum.

Figure 2: Bitcoin Net Unrealised Profit/Loss (NUPL) for Q1 2025

Source: Glassnode

It wasn’t just unrealized losses piling up – Bitcoin accumulation also slowed down in Q1. Onchain data showed weaker buying activity, with wallets refraining from adding to their positions. A key metric for this is Bitcoin’s Accumulation Trend Score, which measures whether larger entities (or a significant portion of the network) are actively accumulating coins. A score close to 1 (dark dots) signals strong accumulation, while a score near 0 (light dots) indicates distribution or a lack of buying.

In Q1, this metric averaged just 0.1, showing little aggressive accumulation. However, the median score was even lower at 0.07, meaning that not only was buying weak overall but most days saw even less accumulation than the already-low average. Simply put, the market wasn’t in the mood to stack more Bitcoin, reflecting the cautious sentiment throughout the quarter.

Figure 3: Bitcoin Accumulation Trend Score

Source: Glassnode

While the broader crypto market struggled through the quarter, there was no shortage of narratives. From major regulatory shifts to a surge in institutional interest and stablecoin adoption, plenty was happening beneath the surface. Let’s dive into the key narratives that shaped Q1.

The first few months of 2025 have been a wild ride for crypto in the US. It all kicked off with the removal of SEC Chair Gary Gensler in an effort to make the new US government seem more crypto-friendly. The US SEC under its new leadership soon dropped their investigations into US-based crypto companies – Uniswap, Coinbase and the like.

On March 6, US President Donald Trump made an announcement that no one saw coming: the US government was setting up a Strategic Bitcoin Reserve using seized Bitcoin held by the Treasury.

The White House also held its first-ever Crypto Summit, bringing together key leaders from the industry including Strategy’s Michael Saylor, Coinbase’s Brian Armstrong, Multicoin Capital’s Kyle Samani and others to talk about how crypto could fit into the country’s financial system. And just a week later, on March 13, the Senate Banking Committee pushed forward the GENIUS Act, a bill focused on stablecoins. The message was loud and clear – Washington is now taking crypto seriously.

Institutional interest in crypto kept picking up speed in Q1 2025, with some big moves that showed just how much traditional finance is getting in on the action.

In February, Ethena Labs (issuer of the USDe stablecoin) secured a massive $100 million investment from Franklin Templeton and FPrime Capital to build iUSDe – a stablecoin designed for institutions, possibly to participate in the broader DeFi ecosystem.

At the same time, the launch of Solana CME futures made it easier for institutions to trade Solana derivatives, proving that interest in altcoins is growing beyond just Bitcoin and Ethereum. And then there was BlackRock, making waves by rolling out its iShares Bitcoin exchange traded product in Europe, reinforcing its push into blockchain on a global scale.

Another big trend this quarter were ETFs. More and more funds were filed to help institutions gain exposure to digital assets. The table below shows ETF filings made by asset managers for some of the major altcoins in the first quarter of 2025 alone.

Figure 4: Altcoin ETFs filed in Q1 2025

Source: AMINA Bank

Real-world asset (RWA) tokenisation took off in Q1, drawing serious interest from both DeFi and traditional finance. One of the biggest moves came from Aave, DeFi’s largest lending platform by total value locked. In March, it launched Project Horizon, a step toward connecting DeFi’s open financial system with the structured world of institutional finance.

A key feature of the project lets institutions use tokenised money market funds (MMFs) as collateral to borrow stablecoins like Aave’s GHO and Circle’s USDC. And this is just the beginning – Aave plans to expand into more types of RWAs and to make it even easier for institutions to tap into DeFi liquidity.

The numbers back up the momentum. According to RWA.xyz, the total value of on-chain RWAs jumped by 25.71% in Q1, reaching $19.8 billion by the end of March. One of the hottest areas is the tokenisation of private credit, which hit $12.43 billion in TVL – a 28% increase in just three months. For those curious to dive deeper, more details on n can be found in our article linked here.

Stablecoins took the spotlight in Q1, standing strong in a market full of ups and downs. By the end of March, the total stablecoin market cap had climbed to $234 billion, attracting a fresh wave of big players eager to claim their share of this booming sector.

With US regulations turning more crypto-friendly, traditional finance is making moves. Fidelity announced plans to launch its own stablecoin. Not far behind, Bank of America revealed its own plans to enter the stablecoin market later this year.

Payments giant Stripe also made headlines, completing its acquisition of Bridge, a company specialising in stablecoin APIs. Meanwhile, USDT issuer Tether solidified its role as a financial heavyweight, becoming the world’s seventh-largest holder of U.S. Treasuries – cementing its influence in both the crypto and traditional financial worlds. Stablecoin issuers are gearing up for big futures. Circle, the company behind USDC, announced plans to go public in late 2025.

On the blockchain side, Solana saw the biggest surge in stablecoin supply this quarter, up 139%, thanks in part to the TRUMP meme coin frenzy. PayPal’s PYUSD on Ethereum also grew by 105%, reaching $670 million in supply, while USDC (Ethereum) and USDT (Solana) saw steady growth of around 28%. USDC was one of the biggest winners of the quarter, hitting an all-time high market cap of $60 billion.

With institutional giants stepping in, adoption growing, and stablecoins cementing their place in both crypto and traditional finance, Q1 made one thing clear – stablecoins aren’t just a part of the system; they’re becoming the backbone of it.

Figure 5: Q1 Stablecoin Supply Growth Percentage

Source: Artemis Terminal, AMINA Bank

As Q1 2025 wraps up, the crypto market is at an interesting crossroads. Bitcoin dominance is on the rise, but altcoins are starting to move more independently, showing signs of a market that’s evolving beyond just following BTC’s lead.

Base is emerging as a strong contender, seeing the highest positive net flows and steady stablecoin growth – helped by Coinbase’s institutional support and an active developer base. Meanwhile, Solana is leading the stablecoin growth race, and with BlackRock expanding its BUIDL fund to the network, we could see both retail and institutional interest pick up.

Real-world asset (RWA) tokenization is another space gaining traction, with platforms like Plume Network bringing their own RWA layer and even Bitcoin getting in on the action through Taproot assets. Traditional companies are also starting to hold Bitcoin in their reserves – Strategy has already stacked up and now Gamestop is joining in. Even Larry Fink is stirring the pot, suggesting Bitcoin could one day replace the U.S. dollar as the global reserve currency.

Still, challenges remain. Exchange liquidity for Bitcoin is something to keep an eye on – if it stays low, we could be in for supply shocks down the line. Solana’s recent cooldown highlights the need for more sustainable use cases beyond just memecoin trading. And, of course, US macroeconomic headwinds (tariffs and recession fears) are still the biggest risk factor.

Right now, the market feels cold, but history has shown that’s often how big runs start. With institutions moving in, new narratives emerging and major players making bold bets, the pieces are slowly falling into place.

Disclaimer – Research

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