Four Factors That Could Shift Crypto Prices in Q2 Following the ‘Best of the Worst’ Quarter
Despite significant developments in the crypto industry, the market has recently registered its weakest Q1 performance in years. However, a crypto analyst suggests several potential catalysts that could make Q2 more favorable. “Frustrating. That’s the best word to describe the past quarter,” commented Bitwise chief investment officer Matt Hougan in a recent market report, characterizing Q1 as the “best worst quarter in crypto’s history.”
Bitcoin and Ether experienced unusual declines in Q1. Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market capitalization, saw price drops of 11.82% and 45.41%, respectively, throughout Q1 2025. Historically, Q1 has been strong for both assets, with Bitcoin averaging a 51.2% increase, making it the second-strongest quarter since 2013, while Ether averaged a 77.4% increase, according to CoinGlass data.
Hougan identified several key catalysts that could drive crypto’s performance upward in Q2. He highlighted the increase in global money supply, noting that “after years of tightening, central banks around the world are indicating a shift toward monetary easing and M2 expansion.” He commented, “Historically, these conditions have been favorable for risk assets, particularly for digital assets.”
Echoing this sentiment, Pav Hundal, lead analyst at an Australian crypto exchange, remarked earlier this year that “in typical conditions, global loosening measures are a reliable lead indicator for crypto.” More recently, analyst Colin Talks Crypto noted that “Global M2 has remained at an all-time high for three consecutive days.” According to economist Lyn Alden, Bitcoin often aligns with global M2 movements 83% of the time.
Moreover, Hougan mentioned that the recent “clean sweep of pro-regulations” in the US could be another bullish factor for the crypto market. “This represents the long tail of regulatory clarity that is not receiving enough attention, and it is just beginning,” he stated.
He also pointed out that the rise in stablecoin assets under management, which surged to an “all-time high of over $218 million” during the first quarter, may indicate that more positive developments await in the crypto market. “The growing adoption of stablecoins will benefit related sectors, including DeFi and other crypto applications,” he added.
The firm further noted that the “geopolitical chaos” observed in the global economy during Q1 2025, particularly following US President Donald Trump’s inauguration and subsequent tariffs, has prompted global investors to reevaluate their portfolios.
Days later, Hougan reiterated his prediction that Bitcoin could potentially surge about 138% from its current price of $84,080 by year-end. “In December, Bitwise forecasted that Bitcoin would reach $200,000 by the end of the year. I still believe that’s attainable,” he said.
Meanwhile, the crypto exchange mentioned that “when the sentiment eventually resets, it’s likely to occur rapidly, and we continue to be optimistic for the latter half of 2025.”
This article does not constitute investment advice or recommendations. Every investment and trading decision carries risk, and readers are encouraged to conduct their own research before taking any action.
