Bitcoin experienced a significant decline in the first quarter of 2026, exhibiting historically unprecedented underperformance compared to US equity markets for a period of approximately six months straight. The cryptocurrency’s movements during this period have given rise to new discussions that it acts as a risk-oriented instrument rather than progressing in parallel with traditional markets.
Market dynamics and policy steps
The decline, which started from the last quarter of 2025, continued with Bitcoin losing approximately 22 percent in the first quarter of 2026. During this period, the S&P 500 index experienced a much more limited loss in the same range. Since the beginning of the year, the Nasdaq index has also seen its worst quarterly performance in the last four years; Thus, sharp movements in both stocks and crypto assets caused the recovery after the 2024 elections to be largely erased.
On the policy side, the change of head of the US Securities and Exchange Commission (SEC) paved the way for new cryptocurrency exchange traded funds; Some regulations passed by Congress also concerned the industry closely. While the decree signed by Donald Trump in August made it easier for pension funds to include alternative assets such as crypto money, private equity and real estate in portfolios, the Ministry of Labor prepared a new regulation in response to this on Monday.
The impact of geopolitical developments and volatility across asset classes
The tension between the USA and Iran in early March caused fluctuations in global markets. While oil prices and the US dollar rose, investors reconsidered their positions with concerns about energy supply and rising costs. Gold, which was generally seen as a safe haven during the period of uncertainty, was subject to intense sales by both institutional investors and governments due to liquidity needs and margin requirements. The sales wave in question brought about one of the sharpest short-term losses in value seen in this asset in recent years.
Bitcoin, on the other hand, showed a relatively durable performance in March, contrary to many predictions. While the cryptocurrency exhibited a periodic increase of approximately 1 percent during this period, gold lost around 11 percent in value. Analyst Mark Connors thinks that this calm in Bitcoin is largely due to the clearing of leverage in recent quarters. It is also pointed out that Bitcoin’s ability to move quickly across borders can reduce the occurrence of forced selling pressure, as in physical assets.
In the future, Bitcoin’s long-standing weak performance compared to stocks may lead to the emergence of its potential for strength in the future. According to analysis, such a long-term price difference was often considered as the beginning of reverse movements in the market direction in the past. At the macroeconomic level, the increasing pressures arising from debt and money supply may increase the need for alternative assets such as Bitcoin.
On the other hand, it is not clear how long this balance in the markets will last. Geopolitical developments and possible fluctuations in energy markets may significantly affect the general market trend and investor confidence in the coming months.
Mark Connors attributed the relatively stable course of Bitcoin in March to the earlier liquidation of leveraged positions. He also pointed out that the easy movement of crypto across borders also reduces the pressure on the market.
Going forward, market experts agree that Bitcoin’s current weak course may continue for a while or change direction with a possible increase in demand. It is considered that the course of the markets may be shaped by geopolitical risks in the coming period rather than the financial structure.
