Bitcoin Lagged Equities and Gold in Q1: Kaiko

Despite dipping by approximately 25% from its January high, Bitcoin, the largest cryptocurrency by market capitalization, still outperformed all other major altcoins in the first quarter.

However, it trailed behind real-world assets like equities and gold, according to Kaiko Research’s latest quarterly report.

Bitcoin outperformed most crypto assets by 12%, but the categories in which it outperformed the most were artificial intelligence (AI) tokens and meme coins, likely due to the decline in meme coin interest due to several scams early this year.

Kaiko attributes the decline to the fading Trump effect that drove markets after the election. In Q1, the weekly trading volume for Bitcoin, Ethereum, and other coins in the top ten was approximately $266 billion, a 30% decrease from November 2024.

Geopolitical uncertainty is another factor driving the decline. Trump’s trade policies have triggered price crashes greater than those from the U.S. election period.

“The macroeconomic uncertainty created intriguing dynamics in the options markets during the first quarter. President Trump's tariff plans triggered the largest spike in short-term at-the-money implied volatilities seen in over a year, surpassing even the volatility experienced during the U.S. election period,” the report notes.

Q2 Predictions

It's not all doom, though. Kaiko researchers have identified four major areas to watch in Q2, including trade policy, stablecoin usage, ETF deadlines, and digital gold.

Global volatility is expected to continue in Q2 and beyond, driven by tariffs. Furthermore, stablecoin growth historically precedes growth in other classes, and if this trend continues, it could bode well for other altcoins.

Meanwhile, there could be further exchange-traded fund (ETF) approvals in Q2, due to upcoming deadlines and clarity within the Securities and Exchange Commission (SEC) following the confirmation of its new chair, crypto-friendly Paul Atkins.