Bitcoin ended March around $66,000, leaving the cryptocurrency down about 22% in the first quarter as war headlines and tariff worries kept the pressure on risk assets.
The price of Bitcoin closed out March around the mid-$60,000s, leaving it down roughly 22% for the first quarter, according to data from CoinGlass.
That makes it the worst start to a year since 2018, as the ongoing U.S.-Iran conflict, tariff uncertainty, and tighter policy dragged risk assets lower across the board, raising the usual question of why Bitcoin is dropping.
So Why Is Bitcoin Dropping?
The move tracked a broader selloff as the S&P 500 also logged its weakest Q1 since 2022, while the Federal Reserve held rates steady and analysts now expect just one cut for the rest of 2026, pushing investors toward safer bets.
Flows were a big part of the story. Spot Bitcoin exchange-traded fund flows ended March on a stronger note, with spot Bitcoin funds pulling in about $1.32 billion for the month, per data from SoSoValue.
But data also shows January and February had already seen roughly $1.82 billion in combined outflows, leaving the first quarter with a mixed picture of recovering demand against a still-heavy price decline.
Analysts at blockchain analytics firm Glassnode pointed out in their monthly overview that while the directional shift “is encouraging, the recovery remains early-stage and uneven, and it would be premature to characterize this as a broad resumption of institutional conviction.”
Risks of Investing in Bitcoin Right Now
Glassnode’s analysts added that CME Basis Yield compressed even further in February, reinforcing “waning incentives for market-neutral strategies compared to January,” and bringing the risks of investing in Bitcoin back into focus as liquidity stays tight.
CryptoQuant’s head of research Julio Moreno noted in an X post on March 27 that the decline comes down to a simple shift under the surface:
“Why is the price of Bitcoin declining if ETFs and MSTR are buying? Because overall Bitcoin spot demand is contracting. This is why you can’t just look at ETFs and Strategy to estimate Bitcoin demand, you need on-chain data to get the full picture.”
As of press time, Bitcoin is trading at $68,735, down 45.5% from its all-time high, which was reached in October 2025 at $126,080, per CoinGecko data.
