Bitcoin closed the first quarter of 2026 with its steepest quarterly loss since early 2018, dropping approximately 22% year-to-date. The cryptocurrency slid from around $95,000 in February to roughly $66,700 by quarter’s end, with losses reaching as deep as 34.6% at the period’s lowest point. The figures come from institutional trading firm Talos, citing data from its financial intelligence arm, Coin Metrics. The decline was driven by a combination of geopolitical conflict, new trade tariffs, and tighter monetary policy expectations.
Despite the steep quarterly drop, Bitcoin demonstrated relative resilience compared to other assets following the outbreak of the Iran war on February 28. Over that period, Bitcoin fell just 1.5%, while gold declined 17%, the Nasdaq dropped 7.6%, and the S&P 500 slid 7.4%, according to Talos data. The cryptocurrency currently remains rangebound between $66,000 and $70,000, with whale transfers at multi-year lows and no significant buying pressure defending those levels, according to a research note from trading firm Wintermute.
Samar Sen, head of international markets at Talos, described the quarter’s performance as a “macro-driven reset rather than a structural shift.” He noted that crypto, alongside other risk assets, came under pressure from the escalation of the Iran conflict, new tariffs, and expectations of tighter monetary policy. Both institutional and retail investors are sitting on the sidelines, unwilling to commit capital until they see regulatory clarity or a change in geopolitical conditions, Wintermute added.
Some indicators point to underlying institutional resilience. U.S. spot Bitcoin ETFs hold approximately $100 billion in assets and recorded net inflows resuming in March, suggesting institutional demand has persisted through the drawdown. Liquidity across order books has also recovered from late-2025 lows, allowing markets to absorb larger price moves more consistently than in previous cycles, Sen explained. He noted that periods of macro uncertainty tend to sharpen focus on risk management and portfolio diversification, and that institutional engagement has continued in that context.
U.S. monetary policy is seen as a critical variable for Bitcoin’s near-term direction. Zeus Research analyst Dominick John told Decrypt that a Federal Reserve pause or easing cycle would release liquidity, lift risk appetite, and help stabilize Bitcoin, while continued hawkishness could tighten liquidity and increase selling pressure. On prediction market Myriad, users assign only a 5% probability to the Fed cutting rates by more than 25 basis points in the first half of the year.
A resolution to the Middle East conflict is also viewed as a potential catalyst for the next quarter. Ryan Yoon, senior analyst at Tiger Research, described the Fed’s stance on rate cuts as “the definitive watershed” for either a strong rebound or a further breakdown in Bitcoin’s price. Myriad users have grown increasingly pessimistic about a near-term ceasefire, with the probability of a U.S.-Iran ceasefire before June falling from 58% at the start of the week to 39%, while the chances of U.S. ground forces being deployed before May rose from 57% to 87% over the same period.
Markus Levin, co-founder of decentralized data network XYO, pointed to a growing regional divergence in markets where access to global financial systems remains constrained, such as Iran, as another factor that could shape Bitcoin’s longer-term trajectory. He noted that Bitcoin usage has historically risen during periods of economic pressure and is likely to do so again if the conflict continues. While such demand would not offset global macro forces in the short term, Levin suggested it could gradually push Bitcoin toward behaving more like a neutral reserve asset, similar to gold. Bitcoin was trading at approximately $66,830 at the time of publication, according to CoinGecko.
Originally reported by Decrypt.
