Where could crypto head in Q2?

After a rocky first quarter, analysts are split on what lies ahead for crypto in Q2.

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

Crypto suffered its worst-performing Q1 since 2018. But are prices starting to turn around? Also, why BlackRock’s CEO is bullish on digital assets.

Three key questions facing crypto in Q2. Where analysts think markets might be headed and what the main catalysts could be.

The ETH/BTC ratio just hit a five-year low. What that signifies, and more key numbers from around the cryptoverse.

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MARKET BYTES

Are crypto prices beginning to turn around?

After ending March sharply lower — and closing out the worst-performing Q1 for crypto since 2018 — crypto prices rose this week as markets waited for Wednesday’s planned rollout of new tariffs from the Trump administration.

Tuesday saw a market-wide rally: BTC was up about 3% to nearly $85,000, ETH rose 3.7% to nearly $1,900, altcoins including DOGE and Cardano saw bounces, and DeFi volumes also spiked.

By Wednesday, bitcoin moved even higher — breaking $87,000 — with some analysts speculating that the tariff policy could have long-term positive impacts on BTC’s price. “Economic uncertainty could lead investors to seek out bitcoin just as they have sought out gold in recent months,” as Coindesk put it.

Here’s what you need to know this week:

Why did prices dive so much in Q1?

Despite a wide range of recent pro-crypto policy changes in Washington, economic uncertainty swept through markets in the early months of 2025. BTC and ETH both saw their worst Q1 in seven years, most crypto-related stocks fell sharply, and the S&P 500 had its worst month since 2022.

Analysts point to several factors: stubbornly high inflation and interest rates, and the market-roiling impact of the Trump administration’s tariff policy. “Many people in the community understand that this is not driven by fundamental reasons,” Oppenheimer analyst Owen Lau told Bloomberg.

No pain, no gains? The Trump administration’s stance is that short-term economic volatility due to tariffs is worth enduring if it creates long-term benefits to the U.S. economy. And some analysts suggest that markets may be adapting to the new reality. As one market watcher told Decrypt, the early-April bounce represents “renewed optimism for the new quarter.”

BlackRock CEO makes bull case for crypto

BlackRock is the world’s largest asset manager, with more than $10 trillion under management. In his annual letter to investors, CEO Larry Fink discussed crypto’s growing importance to the global economy, highlighting the opportunity presented by putting financial assets on blockchains.

“Every stock, every bond, every fund — every asset — can be tokenized,” Fink wrote. "If they are, it will revolutionize investing. Markets wouldn't need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.”

In another part of the letter, he argued that U.S. debt and deficits are imperiling the dollar’s status as the world’s reserve currency, and that BTC could potentially take the dollar’s place.

“I'm obviously not anti-digital assets," Fink noted. "But two things can be true at the same time: Decentralized finance is an extraordinary innovation. It makes markets faster, cheaper, and more transparent. Yet that same innovation could undermine America's economic advantage if investors begin seeing bitcoin as a safer bet than the dollar.”

Flow state… Fink also highlighted the blockbuster success of BlackRock’s spot BTC ETF, IBIT, noting that it has become the third-biggest ETF by inflows (only beaten by massive stock-market index funds), with half of the demand coming from retail traders.

USDC issuer files for IPO as stablecoin industry grows

Hot off the news that the USDC stablecoin just reached a new milestone, with more than $60 billion in circulation (up from $30 billion last March), the token’s issuer, Circle, has filed with the SEC for an initial public offering that will likely come later this year.

There’s been a flurry of stablecoin activity in recent months, with new dollar-denominated tokens launching from firms including Ripple; a stablecoin in “testing” from Wall Street giant Fidelity; and the state of Wyoming considering a stablecoin of its own.

Public interest… This week, Coinbase CEO Brian Armstrong argued for new regulations that would allow U.S. stablecoin holders to earn “onchain interest,” similar to the way conventional banks are able to offer interest to savings-account holders. “Banks and crypto companies alike should be allowed to, and incentivized to, share interest with consumers,” Armstrong posted on X. “This is consistent with a free market approach.”

UP NEXT

Three key questions facing crypto markets in Q2

When Donald Trump was elected last November as America’s “first crypto president,” markets rallied to new all-time highs, and many analysts expected the good times to roll into 2025.

That’s not quite how things have turned out so far. Despite crypto-friendly moves from the White House, the SEC, and beyond, the first quarter of 2025 was the worst-performing for both BTC and ETH since 2018.

Will things turn around in Q2? Here are three of the biggest questions facing crypto over the next few months.

Can crypto prices recover?

Bitcoin has declined for two months, ending the quarter down more than 20% from its new all-time high around $106,000 this winter. ETH is down even more, losing 40% since the start of the year and sitting close to 2022 levels.

As market sentiment has oscillated between “extreme fear” and “fear,” crypto ETFs have seen more than $5 billion in outflows and some analysts have even suggested that we’re entering a bear market.

Despite a “constructive stance for 2Q25,” Coinbase’s David Duong warned that “short-term positive catalysts are still limited, so caution may be warranted for now.” Duong also noted that “historically, April, May, and June are seasonally tough months for crypto assets.”

Other market watchers, however, offered reasons to be hopeful that relief could be on the way during Q2.

Leena ElDeeb, analyst at asset manager 21Shares, argued that a potential interest-rate cut from the Federal Reserve in Q2 could give crypto markets a much-needed boost. “If rate cuts materialize, a wave of liquidity could reignite bullish momentum, pushing equities and Bitcoin past key resistance levels,” ElDeeb said. (According to CME Group’s Fedwatch, analysts believe there’s a 65% probability of the Fed cutting rates in June.)

Another potential catalyst, according to ElDeeb, could be Ethereum’s upcoming Pectra upgrade.

“These changes are expected to boost the appeal of staking-enabled products,” said ElDeeb, which could help expand institutional interest in ETH.

Will new spot crypto ETFs hit the market in Q2?

For months, investors have been awaiting the potential approval of new spot crypto ETFs. ETF issuers have sent a flood of applications to the U.S. Securities and Exchange Commission for funds that would hold assets including XRP, Solana, Litecoin, Dogecoin, Chainlink, Avalanche, Cardano, HBAR, and Polkadot.

Given the SEC’s increasingly favorable posture toward crypto, many issuers are hopeful. Currently, analysts expect Litecoin to receive the first altcoin ETF approval, with DOGE, SOL, and XRP the most likely to receive approval after that, according to Bloomberg.

For the moment, however, approvals appear to be on hold while Trump SEC chief nominee Paul Atkins — who says creating a fair regulatory foundation for crypto will be his “top priority” — awaits a confirmation vote from Congress.

Once approved, altcoin ETFs could help usher in new inflows to crypto markets. A recent report from JPMorgan estimated that XRP and SOL ETFs could attract as much as $14 billion in inflows in the first year.

Will Congress pass crypto legislation?

On March 6, President Trump signed an executive order directing Congress to move swiftly toward creating a comprehensive legislative framework for the crypto industry, setting Congress’ August recess as the deadline.

And bipartisan momentum in both chambers of Congress appears to be building for the passage of landmark stablecoin laws. The Senate’s bill, called the GENIUS Act, has already passed in the Senate Banking Committee and is now awaiting a vote from the full Senate. And in the House, Rep. Bryan Steil, who leads the House Financial Services Committee’s digital asset efforts, just released a draft of its stablecoin bill, the STABLE Act of 2025, last week.

If passed, the bills would create clear definitions for who can issue stablecoins, create bank-like regulations for issuers, and protect the right for stablecoins to be issued on public blockchains like Ethereum.

NUMBERS TO KNOW

528,185 BTC

Total bitcoin holdings of Strategy after the company purchased another 22,048 BTC (nearly $2 billion) over the last week. The firm’s bitcoin treasury, worth roughly $41 billion as of Monday, is the largest of any publicly-traded company, and accounts for 2.5% of Bitcoin’s total supply of 21 million BTC.

25%

The percent of S&P 500 companies that will hold “BTC somewhere on their balance sheets as a long-term asset” by 2030, according to a prediction from Architect Partners’ Eliot Chun in a new report.

0.02193

The newly recorded five-year low of the ETH/BTC ratio, which highlights “just how significant ether’s underperformance to bitcoin has been of late,” reports Unchained. The ratio, which accounts for a 39% drop in ether’s value relative to bitcoin in 2025, reflects mounting challenges faced by Ethereum as network activity has slowed in recent months.

Amount of dogecoin (DOGE) that will be used as part of the Department of Government Efficiency (D.O.G.E.), according to Elon Musk. As Musk told the audience at the America PAC town hall on Sunday in Green Bay, Wisconsin: “There are no plans for the government to use Dogecoin for anything as far as I know.”