The first quarter of 2025 served as a wake-up call for digital assets. Although the year kicked off with optimism stemming from the election of a pro-crypto U.S. President and expectations of a more favorable regulatory landscape, macroeconomic issues soon dominated discussions. Bitcoin reached a staggering all-time high of $109,356 but closed the quarter down 11.6%, marking its second-largest quarterly fall since Q2 2022. Altcoins suffered even more, with indices such as the CoinDesk Memecoin Index (CDMEME) declining by 55.2% and the CoinDesk 80 (CD80) dropping 46.4%.

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One clear indicator of a market realignment is bitcoin’s dominance, which measures its market cap as a percentage of the total for all cryptocurrencies, hitting 62.2% in Q1—the highest since February 2021. This occurred despite a 26.9% drop from bitcoin’s January peak, indicating a significant capital shift towards bitcoin from more speculative assets as concerns around macro volatility and geopolitical uncertainties grew.

The CoinDesk 20 Index (CD20) serves as a barometer for this institutional shift. It fell 23.2% in Q1 yet outperformed most other major digital assets. Only XRP managed to achieve a positive return of 0.4%, thanks to the dismissal of the SEC’s case against Ripple, paired with substantial growth in its RLUSD stablecoin, which saw market cap soar by 323% in Q1.

While ether underperformed, dropping 45.3%, the market showed strong ETF flows and public companies adding nearly 100,000 BTC to their holdings, reflecting bitcoin’s emerging status as a macro asset. Looking ahead to Q2, optimism remains high as new tariff measures have paused, with significant interest in altcoin ETFs also noted.

For an exhaustive look at these dynamics, including full index performance, access the complete Digital Assets Quarterly Report here.