Bitcoin is edging closer to its worst first-quarter return in five years as cryptocurrency markets digest macro-driven volatility from Trump’s tariffs heading into Q2 2025. So far, the top digital asset by market capitalization has declined by over 7% in the first quarter, compared to Bitcoin’s drawdown of nearly 11% in the same quarter of 2020, according to CoinGlass data.

BTC began the year strong, racing to a $108,786 all-time high in January as President Donald Trump’s return fueled market-wide optimism. The hype faded quickly as Trump took office on Jan. 20, and the President's economic tariffs dampened sentiment. Bitcoin fell as low as $76,700 on some trading venues — a 30% drop from its peak.

Despite recent volatility, 21st Capital co-founder Sina G. predicted incoming U.S. quantitative easing and surmised that a reversal may be inbound, as most bearish updates are already priced. “Within a quarter or less, uncertainty around tariffs and government spending will likely be resolved,” Sina G. wrote on X — adding that “focus will then shift to tax cuts, deregulation, and rate cuts,” which may fuel capital inflows to Bitcoin and digital assets.

Aurelie Barthere, Principal Research Analyst at Nansen, echoed the assertion from 21st Capital’s Co-Founder. “There is a decent probability that we have passed peak tariff uncertainty, notably because the administration, especially Treasury Secretary Bessent, is striking a more pragmatic tone around tariffs (a negotiation for collective tariff barrier decrease),” Barthere told The Block.

President Trump plans to announce reciprocal tariffs on April 2, which may or may not trigger more volatility, depending on the outcome. Still, the Nansen Principal Research expects price swings after the event. “We would not be surprised to see some volatility post-April 2, especially as reciprocal tariffs get negotiated between the U.S. and the Eurozone,” added Barthere.

While it’s unclear how Bitcoin volatility might unfold, BTC has historically averaged almost 27% increases during Q2. In the last thirteen years, the cryptocurrency has recorded gains in at least seven years. Plans for a U.S. Bitcoin reserve and stablecoin regulations may also mature in Q2, possibly boosting market sentiment and crypto liquidity. Speaking at last week’s Digital Asset Summit 2025, Bo Hines, Executive Director of the Presidential Working Group on Digital Assets, said stablecoin regulations might arrive on President Trump’s desk by the end of June. Meanwhile, Standard Chartered foresees a $500,000 BTC price target due to the national Bitcoin reserve plan.

Rushi Manche, co-founder of Movement Labs, believes the Q1 price action represents "temporary fluctuations in a much larger transformation." Manche said current market conditions favor a Q2 rebound, and a monetary policy pivot from the Federal Reserve should unlock capital from crypto investments. "The first 100 days are just the foundation. The real catalyst comes when policy finally aligns with the technology's potential," Manche told The Block.