Prices Slump, But Stablecoins, RWAs, and Bitcoin Futures Hit Record Highs: Bitwise Report

According to Bitwise Asset Management, newly inaugurated U.S. leadership delivered sweeping pro-crypto reforms—including a national executive order prioritizing digital assets, the launch of a Strategic Bitcoin Reserve, and the dismissal of most Securities and Exchange Commission (SEC) lawsuits targeting the sector.

Perhaps most impactful was the official termination of Operation Choke Point 2.0, a regulatory chokehold that limited crypto’s access to traditional banking rails. These moves represented a long-awaited victory in Washington, offering the kind of policy clarity the digital asset industry had pursued for over a decade.

Despite the regulatory momentum, markets reacted with a downturn. The Bitwise 10 Large Cap Crypto Index fell 18% in Q1. Ethereum dropped 45%, and crypto equities declined by 27%. “Frustrating,” was how Bitwise CIO Matt Hougan described the quarter—a period when positive structural shifts failed to lift market sentiment.

While token prices dominated headlines, Bitwise’s data shows a different story unfolding under the surface. Stablecoins posted $218 billion in assets under management—up 13.5% from the previous quarter—alongside a 30% surge in transaction volumes.

Tokenized real-world assets (RWAs) gained major traction, jumping over 37% quarter-over-quarter, while regulated bitcoin futures trading volume and open interest reached all-time highs. These developments indicate growing institutional engagement and pivoting toward asset types with real-world utility or compliance-first design.

“Parts of the crypto market are experiencing raging bull markets,” Hougan noted, citing stablecoins, RWAs, and bitcoin futures as key pockets of growth.

Bitwise points to several potential catalysts in Q2 2025. These include increased global liquidity, progress on stablecoin legislation in the U.S., and a rising narrative around bitcoin’s role as a strategic hedge asset.

As central banks turn dovish and major legislative reforms gain traction, crypto infrastructure appears primed for a breakout. The expected repeal of SEC guidance SAB 121 and new banking rules could unlock further institutional participation.

Additionally, with geopolitical instability on the rise, digital assets like bitcoin are being reevaluated as long-term reserve assets by both sovereigns and corporations.

While Q1 may have underwhelmed on price action, Bitwise suggests that the structural groundwork laid during the quarter could lay the foundation for a more powerful rally in the months ahead.

In May, Bitwise CIO Matt Hougan issued a stark warning about the fragility of crypto’s momentum, urging Congress to pass lasting regulation.

Bitwise Chief Investment Officer @Matt_Hougan has voiced serious concerns over Congress's ability to pass meaningful crypto regulation.#Bitwise #Cryptohttps://t.co/dYQyGR2HTV

In a note to clients, Hougan praised recent moves by the Trump administration—such as the creation of a Strategic Bitcoin Reserve and the rollback of SEC enforcement—but stressed that these executive actions are not permanent. Without legislation, he cautioned, future administrations could easily reverse course.

Despite his long-term optimism—predicting new all-time highs and even a potential $200,000 Bitcoin price—Hougan said the industry faces a “rough summer” if lawmakers fail to deliver regulatory clarity. His comments reflect growing concern within the digital asset space that political support alone isn’t enough to secure crypto’s future.

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