Bitwise Chief Investment Officer (CIO) Matt Hougan predicted that the second quarter of 2025 (Q2) could be better despite Q1 2025 being termed “the best worst quarter.” In the Crypto Market Review Q1.25, titled “The Best Worst Quarter in Crypto’s History,” Hougan starts the review with the word “frustrating
Explaining his frustration, the Investment Chief states, “On the one hand, it was historically positive. We saw the first pro-crypto president take office and immediately sign an executive order making the growth of digital assets a national priority. The U.S. created a Strategic Bitcoin Reserve, the SEC dropped nearly all of its lawsuits against the crypto industry; however, “despite all the good news, crypto prices fell sharply.”
Nonetheless, Hougan mentioned that certain arms of the crypto industry were experiencing a bull market. The stablecoin’s assets under management surged to an all-time high of over $218 billion, up 13.50% quarter-over-quarter, while the transaction volume also surged 30.14%. The real-world assets market curve went parabolic in Q1, growing 37.07% quarter-over-quarter to a new all-time high, while the registered Bitcoin futures market and open interest also hit all-time highs.
Moreover, Hougan presented a few upcoming key catalysts that could turn out to be favorable for the crypto market in the second quarter of 2025. After years of quantitative tightening, where the central bank reduces the circulation of money, he expects the banks to shift towards easing the money supply. Historically, this kind of situation has been favorable for digital assets.
The pro-crypto regulations, the SEC dropping a few lawsuits, the restoration of
banking access, and the establishment of a strategic bitcoin reserve are other key elements that Hougan saw as a plus point. When the regulations are crypto-friendly, platforms will be approved, and capital will flow.
The stablecoin legislation expected to be passed by the US Congress will be another major event, which will see banks and institutions issue stablecoins that will benefit DeFi and other sectors in the crypto market. Finally, the CIO expects the investors to reassess their portfolio, as fiat devaluates due to geopolitical and trade wars.
