The second quarter of 2025 started with a shakeup in the crypto world, as President Donald Trump’s new tariff policies sent shockwaves through global financial markets. These tariffs – expected to restart trade tensions with China after a 90-day pause – have sparked fresh worries among investors.
Despite hopes that a crypto-supportive president would boost the market, Q1 told a different story. Ether dropped by 40%, and Bitcoin sank to $78,000 before making a slight recovery.
Coinbase’s Monthly Outlook for April suggests this rocky period might last a bit longer. The exchange expects market pressure to continue through April and into mid-May, driven by the tariff conflict and stricter financial policies.
Cryptocurrencies, known for being riskier investments, were among the first to take a hit. Both Bitcoin and the broader COIN50 index fell below their key 200-day moving averages—a signal many traders see as the start of a bearish trend.
To make things worse, the Fear & Greed Index – which tracks market sentiment – has dropped to “Extreme Fear,” showing just how nervous investors have become.
Still, it’s not all bad news. Coinbase believes the market could find stability by mid-to-late Q2, sometime around May or June. This isn’t the first time crypto has gone through this kind of cycle. Back in 2020, Bitcoin crashed in March but regained footing by May, setting the stage for a big rally later that year.
The same pattern could repeat in 2025, especially if investors start seeing the current dip as a good time to buy.
Crypto analyst Matt Hougan also believes the market could turn around in Q2. While Bitcoin and Ether saw steep drops in Q1 – a period that’s usually strong for them – he remains optimistic. He points to a growing global money supply, looser monetary policies, and clearer U.S. crypto regulations as key factors that could support a rebound.
On top of that, global tension and Trump’s new tariffs are pushing investors to rethink their strategies. Hougan still expects Bitcoin could reach $200,000 by the end of the year.
While Q2 may be about recovery, Q3 is where things could start gaining serious momentum. Coinbase expects strong growth in the second half of 2025. A big reason for this optimism is Bitcoin’s recent halving event – a process that has often led to major price increases in the months that follow.
Another positive sign: institutional investors are becoming more active, especially with the launch of Bitcoin spot ETFs in the U.S. These ETFs are bringing more stability and long-term interest to the market.
ARK Invest, in its Big Ideas 2025 report, predicts a breakout year for crypto, driven by growing adoption and innovation. Coinbase also expects the U.S. regulatory environment to improve, which could help ease fears and attract more investors into the market.
Crypto markets are volatile due to new U.S. tariffs, global tensions, and bearish sentiment from early 2025 declines.
Yes, growth is expected by late Q2 and into Q3 2025, driven by Bitcoin halving, ETFs, and improved regulations.
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