In the first quarter of 2026, the price of the leading cryptocurrency fell by 22.2%. This marks the worst start for the asset in the past eight years.
Digital gold closed on March 31 at $66,619, according to Yahoo Finance. For comparison, on January 1, it was trading at $87,508. A more significant drop at the beginning of the year was recorded only eight years ago, when the asset depreciated by 50% — from $14,112 to $6,973.
The current decline continued the trend from the fourth quarter of 2025. At that time, Bitcoin lost 23%, falling from $114,057 to $87,508. Thus, over the past six months, the leading cryptocurrency has depreciated by more than 40%.
Reasons for the Correction
The retreat from historical highs is largely attributed to geopolitical uncertainty due to the escalation of conflict in the Middle East. Rising tensions have dampened investor sentiment both in the crypto industry and on TradFi markets.
In addition to macroeconomics, the course was pressured by the outflow of funds from US spot Bitcoin ETFs. Andri Fauzan Adjima, head of research at Bitrue, noted that the situation is exacerbated by persistently high inflation, cautious policy by the Fed, and a general retreat from risks in the markets.
According to SoSoValue, the net outflow of funds from spot funds in the first quarter amounted to $496.5 million. The March inflow of $1.32 billion only partially offset the losses of the first two months of $1.8 billion.
Long-term Confidence Remains
Despite the challenging situation in the global economy and unstable ETF inflows, analysts believe that investor confidence in Bitcoin’s long-term prospects remains unshaken.
“Institutional participation and adoption trends remain unchanged. This suggests a cyclical movement rather than a fundamental shift,” said Min Jung, an analyst at Presto Research.
In her view, for a reversal of the downward trend in the second quarter, the market requires more macroeconomic clarity. This primarily concerns the situation in the Middle East.
Earlier, Donald Trump stated that the conflict with Iran could end in two to three weeks even without a deal. Meanwhile, Iran continues to attack neighboring Persian Gulf states. It is expected that on the evening of April 1, the US President will address the nation in prime time to discuss the progress of the operation.
“For a trend reversal in the second quarter, a resumption of fund inflows into ETFs, clear progress in US crypto industry regulation, and a shift to a more accommodative monetary policy will be required,” said Nick Rak, Director of Research at LVRG, in a comment to The Block.
At the time of writing, Bitcoin is trading around $68,800. Over the past day, the asset has risen by 2.9%, according to CoinGecko.
As reported, JPMorgan analysts recognized Bitcoin as the main defensive asset amid the war in Iran.