Crypto market suffers $633.5 billion loss in Q1 2025 amid recession fears and market instability 

This significant drop reflects growing investor concerns amid persistent recession fears and global economic uncertainties.

Daily trading volumes also took a substantial hit, decreasing by 27.3% quarter-on-quarter (QoQ) to an average of $146.0 billion.

For context, trading volumes stood at $200.7 billion in Q4 2024.

This decline extends to centralized exchanges as well, which recorded a 16% drop in trading volume compared to the previous quarter. The report cites recession worries, coupled with the aftermath of the Bybit hack, as key contributors to this trend.

Although January brought a brief period of market euphoria, fueled partly by optimism surrounding political events such as Trump’s inauguration, recession fears soon overshadowed any gains. As investor activity dwindled, token prices and trading volumes steadily declined.

In contrast, Ethereum (ETH) experienced a decline, losing 3.9 percentage points (p.p.) in market dominance to reach 7.9%, marking its lowest point since late 2019. XRP and BNB were the only major tokens to retain their market share, underscoring their resilience amidst broader declines.

Decentralized finance (DeFi) also struggled in Q1 2025, with multichain total value locked (TVL) decreasing by 27.5%. TVL fell from $177.4 billion at the end of 2024 to $128.6 billion by March 2025, largely driven by the depreciation of altcoins.

Berachain’s Boyco pre-deposit vaults alone attracted approximately $2.3 billion in funds, positioning the blockchain as a key contender in the DeFi space.

The report highlighted Solana’s dominance in decentralized exchange (DEX) trading, with its market share rising to 39.6% for the quarter.

Despite this shake-up, Optimism and Polygon managed to maintain their positions for most of the quarter, highlighting the competitive nature of blockchain ecosystems.

In the broader financial landscape, gold emerged as the strongest-performing asset class in Q1 2025, gaining 18.0%.

Meanwhile, the U.S. Dollar Index (DXY) fell 4.6%, potentially influenced by uncertainty surrounding U.S. tariffs and broader geopolitical factors.