Bitcoin Posts Worst Q1 Performance Since 2018, Dropping 22.2%

Bitcoin ended the first quarter of 2026 at $66,619 — down 22.2% from its January 1 price of $87,508, according to Yahoo Finance. The last time BTC posted a worse start to the year was in 2018, when it plunged 50% from $14,112 to $6,973.

Six months of relentless decline

The Q1 sell-off extended a downward trend that began in Q4 2025, when Bitcoin dropped 23% from $114,057 to $87,508. Combined, the leading cryptocurrency has shed more than 40% over the past six months from its all-time highs.

Why this matters

A 40%+ drawdown over two consecutive quarters signals deep stress across crypto markets. Losses of this magnitude impact not just retail speculators but also institutional investors who gained exposure through spot ETFs. Bitcoin's trajectory in the coming months will likely set the tone for the broader digital asset industry.

What drove the correction

The retreat from record levels has been largely fueled by geopolitical uncertainty surrounding the escalating conflict in the Middle East. Rising tensions eroded risk appetite across both crypto and traditional financial markets.

Outflows from U.S. spot Bitcoin ETFs added further pressure. Andri Fauzan Adzima, head of research at Bitrue, pointed to persistently high inflation, the Federal Reserve's cautious stance, and a broad risk-off shift among investors as compounding factors.

According to SoSoValue, net outflows from spot Bitcoin funds totaled $496.5 million for the quarter. A $1.32 billion inflow in March only partially offset the $1.8 billion in losses recorded during January and February.

Analysts eye conditions for a Q2 reversal

Despite the prolonged downturn and uneven ETF flows, several analysts maintain that long-term conviction in Bitcoin remains intact among major market participants.

Min Jung, an analyst at Presto Research, noted that institutional participation and adoption trends have held steady. In her view, the current correction reflects cyclical movement rather than a fundamental shift. However, she emphasized that a second-quarter recovery hinges on greater macroeconomic clarity — particularly regarding the Middle East situation.

Nick Ruck, director of research at LVRG, told The Block that a trend reversal in Q2 would require renewed ETF inflows, tangible progress on U.S. crypto regulation, and a pivot toward looser monetary policy.

Geopolitical backdrop

Donald Trump previously stated that the conflict with Iran could conclude within two to three weeks, even without a formal deal. Meanwhile, Iran has continued striking neighboring Persian Gulf states. A primetime address by the U.S. president on the evening of April 1 was expected to provide an update on the military operation.

At the time the original report was published, Bitcoin was trading near $68,800, up 2.9% over the preceding 24 hours, per CoinGecko data.