March 2025 Recap of Digital Assets Industry
Volatility soared in March due to the market's uncertainty regarding tariffs. Bitcoin dipped -2% and Ethereum -18%, while the S&P 500 and Nasdaq fell -6% and -8%, respectively. The 30-day average daily volatility surged to its highest level since August 2024.
As is typical during macro-driven risk asset sell-offs, the 30-day correlation between BTC and Nasdaq rose from 0.19 on March 4 to 0.60 by March 28. Despite negative price action, U.S. ETFs net purchased 246 BTC and Michael Saylor’s Strategy acquired 29,000 BTC.
Smart contract platforms saw decreased revenues (-36%), DEX volumes (-40%), and stablecoin volumes (-5%) in March. However, demand for stablecoins is growing. The total stablecoin supply on-chain increased from $225B in February to $234B at month-end. Stablecoins are currently in a bull market of their own, with new issuers ranging from VanEck to Fidelity to Trump’s World Liberty Financial all launching or preparing new USD-pegged stablecoins.
Ethereum (ETH) made some technical progress in March as its Pectra upgrade inched closer to deployment. Pectra, expected to launch on mainnet by late April, will introduce several new UX-enhancing features, such as ERC-20 fee payments, transaction batching, and sponsored transactions. Pectra will also enable native smart wallet functionality, including gasless transactions, single-step token approvals, and one-click upgrades from externally owned accounts to programmable smart contract wallets. In all, the upgrade should significantly boost usability to help with mainstream adoption.
President Trump hosted the cryptocurrency industry's elite at the White House in early March for a crypto summit discussing his plans for a US strategic reserve for digital assets. The reserve will be capitalized with bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings.
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