Bitcoin closed the first quarter of 2026 with its worst performance since early 2018, shedding nearly a quarter of its value as war, tariffs, and a hawkish Federal Reserve battered risk assets.

The cryptocurrency fell from around $95,000 in February to roughly $66,700 by quarter's end, a decline of about 22% year-to-date, according to a report from institutional trading firm Talos citing data from its financial intelligence arm, Coin Metrics. Losses reached as much as 34.6% at the quarter's lowest point, per the firm.

Bitcoin remains pinned in a $66,000-$70,000 range with whale transfers at multi-year lows and no meaningful bid defending levels, according to a Wintermute research note shared with Decrypt.

Institutions and retail investors alike "sit on the sidelines, unwilling to commit capital" until they see regulatory clarity or a shift in geopolitical conditions, the trading firm added.

Despite its bruising quarter, Bitcoin held up better than equities and gold after the February 28 outbreak of the Iran war, falling just 1.5% compared to a 17% drop in gold, a 7.6% decline in the Nasdaq, and a 7.4% slide in the S&P 500 over the same period, per data from Talos.

Bitcoin’s performance for the quarter appears to be more of a “macro-driven reset than a structural shift,” Samar Sen, head of international markets at Talos, told Decrypt.



“Crypto, alongside other risk assets, came under pressure following the escalation of the Iran conflict, alongside tariffs and tighter policy expectations,” he added.

U.S. spot Bitcoin ETFs hold roughly $100 billion in assets and saw net inflows resume in March, suggesting institutional demand has weathered the drawdown, Sen explained.

Liquidity across order books has also recovered from late-2025 lows allowing markets to “absorb larger moves,” with market structure “holding up more consistently” than in previous cycles, he added.

“Periods of macro uncertainty tend to slow risk appetite, but they also tend to bring a greater focus on risk management and portfolio diversification, and we’re seeing continued institutional engagement in that context,” he said.

Reaching for a reset

U.S. monetary policy could prove the most important variable for Bitcoin's near-term trajectory, according to Zeus Research analyst Dominick John, who told Decrypt a Fed pause or easing would “release liquidity, lift risk appetite, and help stabilize Bitcoin,” while continued hawkishness “could tighten liquidity and increase selling pressure.”

A resolution to the ongoing Middle East conflict could provide a "critical catalyst" for the next quarter, with the Fed's stance on rate cuts serving as "the definitive watershed for either a powerful rebound or a further breakdown," Ryan Yoon, senior analyst at Tiger Research, told Decrypt.

On prediction market Myriad, owned by Decrypt’s parent company Dastan, users put just a 5% chance on the Fed cutting rates by more than 25bps in the first half of the year. Myriad users are also pessimistic about the Iran conflict, with the chances of a U.S./Iran ceasefire before June plunging from 58% at the start of the week to 39% today, while the chances of U.S. boots on the ground before May have jumped from 57% to over 88% in the same timeframe.



A “growing regional divergence” in markets such as Iran, where access to global financial systems remains “constrained,” could also shape Bitcoin's trajectory, Markus Levin, co-founder of decentralized data network XYO, told Decrypt.

“Bitcoin usage has historically increased during periods of economic pressure and is likely to rise again if the conflict persists,” he said. “That demand will not offset global macro forces in the short term, but over time it can push Bitcoin toward behaving more like a neutral reserve asset, closer to gold.”

Bitcoin was trading at around $66,830 at press time, flat on the day, according to CoinGecko data.

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