The past three months have been eventful for cryptocurrencies as well as traditional markets. The coronavirus outbreak has halted economies and evoked panic amongst investors as uncertainty lingers. The outbreak has also pushed central bankers to move into uncharted territory regarding monetary policy and stimulus measures.

All asset classes experienced sharp declines on ‘Black Thursday’ (March 12th) as panic permeated the markets. While the initial effect on BTC and other cryptocurrencies has been negative, BTC-USD has gained over 75% from its 2020 low. The introduction of unconventional policy tools by central banks around the world should bode well for bitcoin in the long term with its fixed supply schedule and unrivalled status as the leading crypto-asset.

The first quarter has also shown us that Bitcoin is also starting to react more to central bank policy announcements and geopolitical developments. In the final section, we summarize the events that may impact BTC and other crypto-assets. First, we review important metrics and statistics from Q1 2020 to assess the state of the cryptocurrency market going into Q2.

Stablecoins Gain Market Share Amidst Crypto Downturn

Bitcoin’s return during the first quarter for the past five years are shown below, indexed to 100. The best performance during Q1 for BTC was in 2013, where the price grew just over 700% and in 2011, where returns were nearly 300%. The graph below shows BTC’s performance in Q1 2020 is the third worst performance since 2015. In 2018, BTC lost almost half its value in Q1 2018 and in Q1 2015, lost almost 25%.

The same chart for Ethereum’s Ether is shown below, and illustrates ETH’s performance in Q1 2020 is similar to that of Q1 2019.

How have the market capitalisations of Bitcoin and the top 5 altcoins fared in Q1 2020?

The chart below shows that the market capitalisation of BTC and the top 5 altcoins peaked in mid-February but has since fallen below the level seen at the start of the year.