The first quarter of 2025 was a verification of reality for digital assets. While the year began with the optimism promoted by the election of a president of the United States Pro-Crypto and the expectations of a more friendly regulatory environment, macroeconomic challenges quickly came to dominate the narrative. Bitcoin briefly reached a new historical maximum of $ 109,356 before the end of the quarter towards 11.6%, its second largest quarterly decrease since the Q2 2022. Altcoins was worse, with more weighted indexes towards the smallest CAP tokens, such as the MEMECOIN index of COINDESK (CDMEME) and the COINDESK 80 (CD80) in 55.2%and 46%of CDMEM (CDMEME) and CDMEME) and 46%CDMEME) and 46%, 46%.
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Below the surface, a more fundamental change is developing. The gap between Bitcoin and the rest of the market continues to expand, largely driven by institutional behavior. As described in our latest quarterly digital assets report, institutions are playing an increasingly decisive role in configuration of capital flows, preferring liquid and regulated assets of great capitalization. This change is pushing the digital asset market towards more structured strategies and driven by the reference points.
One of the clearest signs of this realignment comes from the Bitcoin domain, which expresses Bitcoin’s total market capitalization as a percentage of market capitalization for all combined cryptocurrencies. This figure increased to 62.2% in the first quarter, its highest level since February 2021. In particular, this increase occurred despite a 26.9% drop in Bitcoin’s total market capitalization since its January peak. Our last picture of the week highlights this trend, which shows how capital turned outside the speculative assets towards Bitcoin as the macro volatility and geopolitical uncertainty mounted.
The Coendesk 20 (CD20) index has become a useful lens to track this institutional change. While the index fell 23.2% in Q1, it significantly exceeded most of the main digital assets. XRP was the only CD20 component to publish positive performance, increasing 0.4% in the quarter, driven by the dismissal of the SEC against Ripple, as well as a strong growth in its RLUSD stable. RLUSD market capitalization increased 323% in the first quarter to reach $ 245 million, while cumulative negotiation volumes exceeded $ 10 billion in just over three months.
On the contrary, Ether fell 45.3%, with the low performance of most of the main assets amid the continuous migration of user activity to layer 2s and the lack of positive catalysts. The US ETF spot eth. UU. They saw net exits of $ 228 million in Q1, compared to net tickets of more than $ 1 billion for Bitcoin ETF. The ETH/BTC ratio decreased to 0.022, its lowest level since May 2020, reinforcing the change in the relative domain of this cycle.
Bitcoin’s broader role as an asset macro also continued to win traction. In addition to the strong ETF flows, public companies added almost 100,000 BTC to their holdings in the first quarter, which represents an increase of 34.7%. This brought the total number of such companies to 689,059 BTC, equivalent to more than $ 56.4 billion to current prices. The launch of the US Bitcoin Strategic Reserve. UU., Together with the introduction of wider digital asset storage by the Treasury, further stressed Bitcoin’s growing legitimacy within US politics.
Looking at Q2, the tone in the markets has improved after the recent pause in the new tariff measures. Risk assets responded favorably, and Altcoin ETF’s optimism is still high. There were almost 40 ETF spot requests for Altcoins only in Q1, led by Solana and XRP, which had eight files. Other assets requesting ETF Spot included Litecoin, Dogecoin and Polkadot. With Solana’s futures they now live in the CME, the precedent for exposure to institutional degree altcoin continues to build.
The first quarter offered a reminder that digital assets no longer move in isolation. As macro conditions and policy changes evolve, they begin to remodel the regulatory environment, capital is consolidating in assets with deeper liquidity, stronger narratives and institutional relevance. The Bitcoin ascending domain, changing ETF flows and the fragmentation of the Altcoin’s performance point to a market that is emphasized around structural factors instead of feeling alone.
For a deeper immersion in these dynamics, including complete index performance and constituent ideas, you can access complete Quarterly Digital Assets Report here.
