Bitcoin closed the first quarter of 2026 down approximately 23%, falling from a January 1 open near $87,500 to around $66,700 by March 31 — shedding more than $20,000 per coin over three months. It marks the third-worst opening quarter in Bitcoin’s recorded history and the worst since the ICO bear market of 2018, when it fell nearly 50% in the same period. The quarter also followed a brutal Q4 2025, in which BTC dropped roughly 25% from its October all-time high near $126,000 — marking the first back-to-back quarterly decline since 2022.

The decline wasn’t a single sharp event but a grinding, multi-factor squeeze. January opened with brief optimism before sellers took control, closing the month down roughly 10%. February was the worst stretch, with a nearly 15% drop that pushed price below $70,000 for the first time since mid-2025, including a single day on January 30 when nearly $1 billion exited U.S.-listed spot Bitcoin ETFs — the worst single-session outflow since August 2025. March stabilized, gaining back about 6.7%, but wasn’t enough to offset the damage.

Four forces drove the rout. The U.S.-Iran conflict, which escalated sharply in late February, pushed WTI crude above $100 per barrel and crushed risk appetite across global markets. A frozen Federal Reserve — holding rates at 3.5%–3.75% with seven FOMC members now projecting zero cuts in 2026 — removed the macro tailwind that had supported risk assets through much of 2024 and early 2025. Sustained ETF outflows through January and February erased much of the institutional demand built over the prior year, with Q1 ending in net redemptions of roughly $500 million despite a positive March. And a broader equity selloff — the S&P 500 fell 7%, the Nasdaq 10% — dragged crypto down alongside it.

This story is an excerpt from the Unchained Daily newsletter.

Ethereum fared worse, closing Q1 down approximately 32%. The total crypto market cap shed around $900 billion over the quarter.

The most striking data point may be the duration. Bitcoin lagged U.S. equities for nearly six consecutive months from early October 2025 through the end of March — a stretch that Mark Connors, founder of Risk Dimensions, called unprecedented. “That’s never happened,” he told CoinDesk. The trend has reopened a hard question: whether Bitcoin is behaving more like a high-beta risk trade than an inflation hedge — particularly as gold surged roughly 19% over the same period. Connors argued the extended underperformance may itself be a contrarian signal, though he offered a candid timeline: “It’s either two months or two years.”