The crypto market took a major hit in the first quarter of 2025, losing almost 20% of its value. This wiped out all the gains from late 2024, leaving the total market value down to $2.8 trillion – a drop of $3.8 trillion. Daily trading volume also plummeted by 27%, reaching $146 billion. This downturn sharply contrasts with the market’s growth in the previous year.
Bitcoin’s Dominance
While the overall market suffered, Bitcoin held its ground remarkably well. Its market share soared to nearly 60%, the highest in four years. Although Bitcoin’s price peaked at $106,182 in January and then fell about 12% to $82,514 by the end of March, it outperformed other assets like gold and US Treasury bonds, which are usually considered safe havens during market uncertainty.
Ethereum and the Altcoin Slump
Ethereum, on the other hand, took a much harder hit. Its price crashed by 45%, erasing all of its 2024 gains. Its market share dropped to around 8%, its lowest point since late 2019. Analysts attribute this partly to the increasing use of “Layer 2” networks, which operate on top of Ethereum but don’t use the main Ethereum network.
The Meme Coin Meltdown
The once-hot meme coin market experienced a significant crash. A major scam involving the Libra token, launched by Argentina’s president, severely damaged investor confidence. This led to a massive drop in new token launches, with daily launches on Pump.fun falling by over 50% by late March.
DeFi Takes a Hit
The decentralized finance (DeFi) industry also wasn’t spared. The total value locked in DeFi projects plummeted by 27% to $48 billion. Ethereum’s dominance in DeFi also fell to 56%.
Winners and Losers
While most of the market suffered, stablecoins like Tether (USDT) and USD Coin (USDC) saw increased popularity as investors sought safer options. Solana also maintained its leading position in decentralized exchanges (DEXs), holding a 39.6% market share, largely due to the meme coin craze. However, even Solana’s dominance began to fade as the meme coin hype died down.
The Big Picture
The first quarter of 2025 served as a stark reminder of the volatility in the cryptocurrency market. The rapid shift in market sentiment resulted in a massive loss of nearly $1 trillion in market value in just three months.
