The first quarter of 2025 was a reality check for digital assets. While the year began with optimism driven by the election of a pro-crypto US president and expectations of a friendlier legislative environment, macroeconomic challenges quickly came to dominate the narrative. Bitcoin briefly reached a new height of all the time of $ 109,356, before ending the quarter with 11.6%, the second largest quarterly fall since 2nd quarter and.

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Under the surface, a more basic shift plays out. The gap between Bitcoin and the rest of the market continues to expand, driven extensively by institutional behavior. As described in our latest digital assets quarterly report, institutions play an increasingly crucial role in the design of capital flows that prefer fluid and regulated assets with large capital. This shift pushes the digital asset market towards more structured, benchmark-powered strategies.

One of the clearest signs of this adaptation comes from Bitcoin dominance expressing Bitcoin’s total market value as a percentage of market value for all cryptocurrencies together. This figure rose to 62.2% in 1st quarter, its highest level since February 2021. In particular, this increase occurred despite a 26.9% decrease in Bitcoin’s total market value from its January top. Our recent week’s diagram highlights this trend that shows how capital rotated out of speculative assets and into Bitcoin as macro -oil catility and geopolitical uncertainty mounted.

Coindesk 20 index (CD20) has emerged as a useful lens for tracking this institutional shift. While the index fell 23.2% in Q1, it significantly exceeded most major digital assets. The XRP was the only CD20 component that sent a positive return, increased 0.4% in the quarter, driven by the dismissal of SEC’s case against Ripple, as well as strong growth in its RLUSD stableCoin. RLUSD’s market capital rose 323% in Q1 to reach $ 245 million, while cumulative trading volumes exceeded $ 10 billion in just over three months.

In contrast, Ether 45.3% – underpinned most major assets in the midst of continued migration of user activity to LAG 2S and lack of positive catalysts. US ETF -TFs experienced Net Extensions of $ 228 million in the 1st quarter compared to net flow of over $ 1 billion for Bitcoin ETFs. ETH/BTC ratio fell to 0.022, its lowest level since May 2020, which strengthens the shift in relative dominance this cycle.

Bitcoin’s wider role as a macro asset also continued to have traction. In addition to strong ETF streams, public companies added nearly 100,000 BTC to their inventory in Q1, which represented an increase of 34.7%. This brought the total number of such companies to 689,059 BTC – corresponding to more than $ 56.4 billion at current prices. The launch of the US strategic Bitcoin Reserve, along with the introduction of a wider digital active stock of the Treasury, further emphasized Bitcoin’s growing legitimacy in US policy.

Looking for Q2, the tone of markets has improved after the recent break in new customs measures. Risk assets responded positively and ALTCOIN ETF optimism remains high. Nearly 40 spot -TF applications for Altcoins were submitted in Q1 alone, led by them for Solana and XRP, each of which had eight archives. Other assets that applied for Spot -Tfs included Litecoin, Dogecoin and Polkadot. With Solana-Futures now lives on CME, the precedence of exposure to institutional quality continues to build.

The first quarter offered a reminder that digital assets are no longer moving in isolation. As macro conditions develop and political shifts begin to reshape the regulatory environment, the capital is consolidated into assets with deeper liquidity, stronger narratives and institutional relevance. Bitcoin’s rising dominance, changing ETF streams and the fragmentation of altcoin — events all point to a market that calibrates around structural factors rather than mood alone.

For a deeper dive into this dynamic, including full index benefit and constitutive insight, you can access the full Digital Enable Quarterly Report here.