The Best Worst Quarter in Crypto’s History

Greetings, Crypto Nads 👋,

This newsletter could be your essential crypto breakdown, as this one’s a bit different. Because Q1 2025 was, in many ways, the most paradoxical quarter we’ve seen in a while. 🤔

On one side, there were headlines we’ve dreamed of for years: the U.S. elected a pro-crypto president, created a Strategic Bitcoin Reserve, and saw the SEC roll back almost all its anti-crypto lawsuits. Even Trump admin shut down Operation Choke Point 2.0.

Yet prices? They tanked.

Ethereum dropped 45%. The Bitwise 10 Large Cap Index fell 18%. Even crypto equities were down a steep 27%.

So, what happened? And where do we go from here?

🧩 A Quarter of Contradictions

Let’s start with the basics. It’s rare to see a quarter so rich in bullish news yet so poor in market performance. The typical correlation between positive fundamentals and price just didn’t show up.

You’d think that Trump signing an executive order titled “Strengthening American Leadership in Digital Financial Technology” would pump the markets. Or that the SEC dropping enforcement actions would unleash a buying frenzy. 

But instead, the crypto market saw its largest pullback since early 2023.

 📩 Have you ever seen this level of disconnect between crypto news and price? Hit reply - your insight might get featured in our next issue!

💰 What’s Working: Stablecoins, Tokenization, and Institutional Inflows

While prices cooled off, several corners of the crypto ecosystem quietly exploded.

Stablecoins led the charge. Assets under management crossed $218 billion - an all-time high. Even more impressively, transaction volume jumped over 30% quarter-over-quarter. This isn't just passive holding - it's active usage, hinting at broader adoption in payments, trading, and cross-border settlements.

Tokenized Real-World Assets (RWAs) also had their moment. These blockchain-based representations of real-world value - think U.S. Treasuries, real estate, and commodities - grew 37.07% last quarter alone. That’s a new record.

Then there’s the institutional flow. Regulated Bitcoin futures saw both volume and open interest hit all-time highs. In plain terms: big money is entering the space - not for memes, but for macro.

📊 Think crypto's not gaining credibility? Think again.

🌊 Tidal Shifts Ahead: Key Catalysts for Q2

While Q1 tested everyone’s patience, Q2 is shaping up to be full of opportunity. Here’s what’s on the radar:

• Regulatory Relief Is Real

The repeal of SAB 121. The dismissal of lawsuits. The restoration of banking access. Combined, these are unlocking serious potential for innovation and capital inflow.

Entrepreneurs are no longer walking on eggshells. Expect a wave of U.S.-based projects, startups, and institutional-grade platforms to emerge - finally able to operate with clarity.

• Stablecoin Legislation Is Coming

The U.S. Congress is expected to pass federal stablecoin legislation by July. Yes, this summer.

The new law could greenlight banks, fintechs, and payment platforms to launch regulated stablecoins at scale. And that means a trickle-down effect to DeFi, remittances, and payment infrastructure.

📬 Do you think regulated stablecoins will drive the next wave of adoption? Let us know your take!

• Bitcoin’s Macro Moment

With global trade wars, capital controls, and inflation jitters on the rise, Bitcoin is increasingly being viewed as “digital gold.”

Abu Dhabi’s sovereign wealth fund bought $437 million worth of BTC last quarter. GameStop raised $1.5 billion to load up on the asset. Even state legislatures in the U.S. are competing to make Bitcoin legal tender.

This is no longer fringe. It’s fiscal strategy.

💥 But Not Everything Is Rosy

Q1 wasn’t without its stumbles.

• ByBit suffered a record $1.5 billion hack, the largest in crypto history in Q1,2025.

• Meme coins collapsed - TRUMP, MELANIA, and LIBRE led the fall, showcasing the inherent volatility of low-utility tokens.

• Despite Ethereum's strong fundamentals, it remains heavily sold off - still down 45% in the quarter.

These events show that while infrastructure is strengthening, speculation still dominates headlines and emotions.

📈 The Data Speaks: Risk Assets Still Face Pressure

Bitwise compared crypto performance to traditional asset classes. It’s clear that while commodities and equities held up, crypto lagged.

This might be short-term pain. Central banks are signaling monetary easing, and if global M2 (money supply) rises, digital assets could benefit massively.

Liquidity matters. And Q2 could see that liquidity return.

🏁 Final Thoughts: Are We Early or Just Tired?

The truth is, market prices and investor sentiment often lag behind fundamentals. Right now, stablecoins, RWAs, and regulatory clarity are flashing green. Institutional players are buying Bitcoin like never before. Yet, prices remain underwater.

That tells us something: sentiment hasn’t caught up with reality. And that’s where opportunities are born.

 💬 Which segment - stablecoins, tokenization, or Bitcoin - is most bullish in your eyes? Drop us a reply and be part of the discussion.

Quick Recap

• 📉 Prices fell - but fundamentals soared

• 🏛️ Pro-crypto policy rolled out fast under the new administration

• 💵 Stablecoins hit $218B AUM, with rising real-world usage

• 🏗️ Tokenized assets gained momentum (+37% in Q1)

• 🏦 Institutional investors are entering quietly but with conviction

• 📜 Stablecoin legislation and macro liquidity could drive Q2 gains

Stay tuned, nad’s.
We’ll be tracking Q2 week by week - and as always, decoding the signal from the noise.

Until next time,
From FOMOchain Team.