Source: Cointelegraph Original: "{title}"
Despite significant progress in the cryptocurrency industry recently, the market has just recorded its worst first-quarter performance in years—however, one cryptocurrency analyst pointed out that several catalysts may lead to a more optimistic performance in the second quarter.
"It's frustrating. That's the most fitting word to describe the past quarter," said Matt Hougan, Chief Investment Officer of Bitwise, in the latest market report, referring to the first quarter as "the best worst quarter in cryptocurrency history."
The two largest cryptocurrencies by market capitalization, Bitcoin (BTC) and Ethereum (ETH), fell by 11.82% and 45.41% respectively in the first quarter of 2025, a period that has historically been strong for both assets. According to CoinGlass data, the first quarter has averaged the second strongest performance for Bitcoin since 2013 (up 51.2%) and has always been the best quarter for Ethereum (up 77.4%).
Hougan pointed out several key catalysts that could help cryptocurrencies achieve more gains in the second quarter.
He mentioned the growth of the global money supply, stating, "After years of tightening, central banks around the world are signaling a shift towards monetary easing and M2 expansion."
"Historically, these conditions are favorable for risk assets, especially for digital assets," Hougan noted. Pav Hundal, Chief Analyst at Australian cryptocurrency exchange Swyftx, expressed a similar view in a February interview with Cointelegraph, stating, "Under normal circumstances, global easing measures are typically a reliable leading indicator for cryptocurrencies."
Recently, analyst Colin Talks Crypto stated on April 14 that "global M2 has remained at historical highs for three consecutive days." Economist Lyn Alden wrote in a September research report that Bitcoin has aligned with global M2 trends 83% of the time.
Hougan also mentioned that "comprehensive regulatory support" in the U.S. could be another positive factor for the cryptocurrency market. "This is a long-tail effect of regulatory clarity that has not been fully discussed yet, and it has just begun," Hougan said.
The growth of assets under management in stablecoins may also indicate further increases in the cryptocurrency market this year. Hougan stated that the assets under management in stablecoins surged to "a historic high of over $218 million" in the first quarter.
"The increasing popularity of stablecoins will benefit related sectors, including decentralized finance (DeFi) and other crypto applications," he said.
The company also noted that the "geopolitical turmoil" that emerged in the global economy in the first quarter of 2025, primarily triggered by tariff policies following U.S. President Trump's inauguration, "is prompting global investors to reassess their portfolios."
Just a few days ago, Hougan reiterated his prediction that Bitcoin could rise approximately 138% from its current price of $84,080 by the end of the year.
"In December last year, Bitwise predicted that Bitcoin would reach $200,000 by the end of the year. I believe that target is still achievable," Hougan said.
Meanwhile, cryptocurrency exchange Coinbase recently stated, "When market sentiment eventually shifts, it could happen quite rapidly, and we have a constructive outlook for the second half of 2025."
Related: Coinbase: The crypto market is in a bear market, with a potential rebound in the third quarter.
This article does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers should conduct their own research before making decisions.
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