Bitcoin (BTC) ended the first quarter of 2026 by dropping 23.8%, marking its worst first-quarter performance since 2018.
According to data from Yahoo Finance, bitcoin closed the first quarter at $66,619 on Tuesday, down from $87,508 on Jan. 1, 2026. The quarterly drop was the largest since Q1 2018, when bitcoin fell 50% from $14,112 to $6,973.
Bitcoin's 24% drop also extends the significant decline in the fourth quarter of 2025, when it slipped 23% to $87,508 from $114,057. This means that the world's largest cryptocurrency has lost about 41.6% of its value over the past six months.
The cryptocurrency market as a whole retreated further from its October 2025 all-time high amid escalating geopolitical tensions in the Middle East, weighing on investor sentiment across both crypto and traditional equities.
On top of macroeconomic uncertainty, analysts pointed to a reversal in U.S. bitcoin exchange-traded fund flows, which negatively impacted the cryptocurrency's price.
Andri Fauzan Adziima, Research Lead at Bitrue, said bitcoin's first-quarter decline was driven "primarily by" ETF outflows, coupled with sticky inflation, a cautious Fed, and broader risk-off sentiment across markets.
According to SoSoValue data, spot bitcoin ETFs saw $496.5 million in net outflows during the first quarter, with outflows of $1.8 billion in the first two months partially offset by $1.32 billion in inflows in March.
Despite the ongoing macroeconomic uncertainty and negative ETF flows, analysts said long-term conviction in bitcoin remains strong.
"There is limited evidence of a structural shift in long-term conviction around bitcoin," said Min Jung, research associate at Presto Research. "Institutional participation and adoption trends remain intact, suggesting the move has been more cyclical than fundamental."
For the downward trend to reverse in the second quarter of 2026, Jung said there needs to be greater clarity across the macro landscape, particularly around the situation in the Middle East.
U.S. President Donald Trump announced earlier today that the U.S.-Iran conflict could end in two to three weeks, even if they don't reach a deal, while Iran continues to launch attacks on nearby Gulf countries. Trump is reportedly expected to deliver a prime-time address on Wednesday evening to deliver an update on the Iran war.
"Reversing the trend in Q2 will require renewed ETF inflows, clearer progress on crypto-friendly U.S. regulations, and a shift toward easier monetary conditions," LVRG Research Director Nick Ruck told The Block.
As of 2:45 a.m. on Wednesday ET, bitcoin traded up 2.5% in the past 24 hours at $69,116, according to The Block's bitcoin price page.
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