The shares of Coinbase Global Inc. fell by more than 30% in the first quarter. This puts the largest US crypto exchange operator on track for its worst result since the FTX collapse at the end of 2022. Other publicly traded crypto companies — from Galaxy Digital to Riot Platforms and Core Scientific — are also experiencing double-digit losses. The correction is not limited to stocks: Bitcoin has fallen by over 10%, and Ether by more than 45%.
The sell-off is attributed less to industry-specific developments than to macroeconomic risks. The fear of a global recession has been growing since President Trump intensified his trade policy and announced new tariffs. Negative economic data last Friday exacerbated the trend: The S&P 500 is on track for its weakest quarter since mid-2022. Investors are avoiding risky assets, with digital assets at the top of the hit list.
This is not a fundamental crypto correction," says Owen Lau, analyst at Oppenheimer. "The selling pressure comes from outside: trade conflicts, recession concerns – these are the drivers." Stocks like Coinbase are particularly affected, whose business model heavily depends on trading volume in more volatile altcoins like Ether. Stocks of this type are even riskier compared to Bitcoin itself, according to Lau – among other things because of insolvency risks.
Gold experiences a record quarter. As a classic risk hedge, the precious metal has reached its best three-month value since 1986. The expectation that U.S. government bonds cannot fulfill this role in the short term has driven investors into physical assets – with clear consequences for the relative status of Bitcoin as "digital gold.
Yet the start of the year was still marked by euphoria. On the day of Trump's inauguration in January, Bitcoin climbed to an all-time high of over 109,000 US dollars. But with the disillusionment over the political implementation, the setback followed: Although the US government established a strategic Bitcoin reserve, without capital commitment or expansion strategy, it remained a symbolic act. Currently, the price is quoted at around 82,000 dollars.
Even price gains after Trump's election victory have since evaporated. Coinbase, mining companies, and blockchain platforms lost in unison—with one exception: MicroStrategy by Michael Saylor is still in the positive as one of the few crypto securities since November.
Despite the industry's growing influence in Washington, the market reaction remains subdued. Analysts like Connor Loewen from 3iQ speak of lacking impulses: "What we saw a few months ago – it can hardly get any crazier." New catalysts are needed. Until then, the industry remains in downward mode.
