So what actually drove this? And what does it mean going into Q2? Let’s get into it.

Most people blamed the market on macro sentiment. Fair enough. I mean there is a war on. But there was a specific moment when things cracked.

The sharpest part of the decline happened between mid-January and early February, coinciding with the nomination of Kevin Warsh as the next Federal Reserve Chair. That signal pointed to a potential hawkish shift inU.S. monetary policy. Markets didn’t like it. Crypto sold off fast.

The market then stayed rangebound for the rest of the quarter, even as the US-Iran war added another layer of geopolitical uncertainty. Risk assets stalled. Safe havens moved.Here’s the kicker. The asset that benefited most from all this chaos was not Bitcoin. Not gold. It was crude oil.

Crude oil surged 76.9% in Q1, reversing its 2025 decline entirely. The move was driven by global supply shocks tied to the US-Iran conflict.Gold held up too. It gained 8.1%, continuing the record-breaking run it started in 2025, supported by central bank demand and its role as ageopolitical hedge.

Bitcoin fell 22.0%, underperforming every major asset class. For context, the NASDAQ dropped 7.1% and the S&P 500 fell 4.8% in their worst quarters since 2022. Bitcoin fell three times more than equities. That’s not the narrative Bitcoin bulls want to tell.

Now, that’s not the whole story.

While everything else sold off,stablecoinsdid something interesting. They stayed put.The total stablecoin market cap ended Q1 at $309.9 billion, up a marginal $1.6 billion (0.5%) for the quarter. In a $622 billion drawdown environment, flat is actually a strong result. Stablecoins are doing their job as a liquidity anchor.

But the composition shifted. USDT saw its first meaningful supply decline since 2022 Q2, falling 1.6% to$184.1 billion. Meanwhile, USDC grew 2.4% to $77.1 billion.

Sky’s USDS spiked 30.8% with the launch of Sky Agents, and WLFI’s USD1 grew 32.5% following a Binance airdrop campaign. These are small in absolute dollar terms. But they’re moving fast, and they point to a stablecoin landscape that is quietly becoming more competitive. WLFI has its own separate issues now with these Dolomite loans and governance questions. Yet for the moment, they don’t seem to be affecting USD1.

Source: Altcoin Buzz