Bitcoin posted a -23.21% return in Q1 2026 and marked the third-worst first-quarter performance since 2013 according to CoinGlass data.

The loss falls far below Bitcoin’s (BTC) historical Q1 average of 45.90% and sits well below the median return of -2.26%.

Only two prior first quarters posted worse performance: Q1 2018 at -49.7% and Q1 2014 at -37.42%.

Ethereum fared worse with -32.17% in Q1 2026, also the third-worst since 2016, trailing its historical Q1 average of 66.45% and median return of 4.37%.

Bitcoin historical Q1 pattern shows mixed performance across years

Bitcoin’s quarterly returns since 2013 show no consistent first-quarter pattern. Strong Q1 gains in 2013 (+539.96%), 2021 (+103.17%), 2023 (+71.77%), and 2024 (+68.68%) contrast sharply with losses in 2014 (-37.42%), 2015 (-24.14%), 2018 (-49.7%), 2022 (-1.46%), 2025 (-11.82%), and 2026 (-23.21%).

The historical Q1 average of 45.90% gets pulled higher by extreme outliers like 2013’s +539.96% and 2021’s +103.17%.

The median Q1 return of -2.26% provides a more accurate picture, showing first quarters tend toward slight losses more often than gains.

Q4 historically posts the strongest performance with a 77.07% average and 47.73% median. Q2 averages 27.11% with a 7.57% median, while Q3 averages 6.05% with a 0.96% median.

Recent years show increasing volatility. 2024 posted strong gains across Q1 (+68.68%), Q3 (+0.96%), and Q4 (+47.73%) while Q2 dropped -11.92%. 2025 saw Q2 (+29.74%) and Q3 (+6.31%) gains offset by Q1 (-11.82%) and Q4 (-23.07%) losses.

2026 Q1 decline follows October liquidation event

The Q1 2026 loss follows Bitcoin’s October 2025 all-time high and the October 10 liquidation event that triggered $19 billion in market-wide liquidations.

Bitcoin fell from $126,080 to current levels around $66,000, a 48% decline from the peak.

Q1 2026’s -23.21% return exceeds Q4 2025’s -23.07% loss, creating back-to-back losing quarters.

The last time Bitcoin posted consecutive quarterly declines occurred in 2022, which saw losses across all four quarters: -1.46%, -56.2%, -2.57%, and -14.75%.

TLDR:

• Stablecoins like USDC and PYUSD now offer yields above 4%, far outpacing bank savings rates near 0.01%.
  
• The CLARITY Act missed its March 1, 2026 deadline amid heavy banking industry resistance in the Senate.
  
• Tokenized T-bills settle instantly and globally, cutting out SWIFT fees and traditional multi-day windows.
  
• JPMorgan analysts flagged CLARITY Act passage as a potential trigger for major crypto inflows in late 2026.
  

Stablecoins are reshaping how retail and institutional investors think about deposit alternatives. Digital dollar assets like USDC and PYUSD now offer yields above 4%, delivered through exchanges, wallets, and decentralized protocols.

Meanwhile, traditional savings accounts at major banks remain near 0.01%. The growing gap has sparked fierce debate in Washington, with the CLARITY Act stalling past its March 1, 2026 White House deadline amid continued banking industry resistance.

Yield Competition Puts Banks Under Pressure

Banks have long profited by collecting deposits at low rates and lending them out at 5–7%. That spread model is now facing a direct challenge from stablecoin issuers.

Treasury-bill reserves backing these digital assets generate 4–5% returns, which platforms pass along to holders through revenue-sharing programs.

Crypto analyst Adam Livingston argued on X that the banking sector is losing this battle by choice. He wrote that stablecoins offer “zero branches, zero tellers, and zero KYC theater for every transaction” while reserves sit in actual T-bills that return yield directly to users.

The cost structure difference between banks and stablecoin issuers is hard to ignore. Legacy systems, compliance teams, and physical infrastructure drive overhead costs for traditional banks. Stablecoin platforms, by contrast, operate with far leaner models and pass savings to users.

Regulatory Battles Reflect Industry Tensions

The GENIUS Act attempted to prevent stablecoin issuers from paying direct interest to holders. However, the market adapted quickly.

Exchanges and smart contracts now route Treasury returns to users without issuers paying interest directly.

The CLARITY Act, which would have established broader crypto market structure rules, missed its March 1 deadline. Banking lobbyists remain active in Senate Banking Committee discussions.

Critics say the industry is pushing for regulatory barriers rather than competing on product quality.

Livingston was pointed in his criticism, writing that banks “pressured the OCC into a 376-page rulemaking precisely to close loopholes” that allowed customers to earn market-rate yields. He suggested the banking lobby prefers legislative protection over innovation.

The Office of the Comptroller of the Currency rulemaking referenced in that critique targeted programs like Coinbase’s revenue-sharing model. Whether regulators will sustain that approach remains an open question as the debate continues in Congress.

Market Shifts Signal Long-Term Structural Change

Tokenized real-world assets are already settling on-chain at faster speeds and lower costs than traditional systems.

Products like tokenized T-bills allow investors to hold interest-bearing instruments globally without SWIFT fees or multi-day settlement windows. This represents a fundamental change in how capital moves.

JPMorgan’s internal analysts, according to Livingston, have quietly acknowledged that CLARITY Act passage could trigger significant crypto inflows in the second half of 2026.

Meanwhile, both retail and institutional money continues moving toward yield-bearing digital assets. The trend is gaining momentum regardless of legislative outcomes.

The Silicon Valley Bank collapse in 2023 added a new dimension to the stablecoin conversation. Fully reserved stablecoins carry a different risk profile than fractional-reserve bank deposits, and that distinction is drawing attention from investors who lived through recent bank failures.

The deposit flight narrative is no longer theoretical — it is showing up in capital flow data across the financial sector.

Lighter reported that its upgraded liquidity pool system successfully limited ADL losses to a pre-determined threshold.

On February 26, Lighter, a decentralized crypto exchange, announced that its upgraded liquidity pool system successfully resisted a $50 million ARC perpetual long squeeze attempt.

This occurred after approximately 600 traders reversed a whale’s position, resulting in an $8.2 million loss, and the episode tested Lighter’s newly launched LLP Strategies, capping the downside risk for liquidity providers at just $75,000.

LLP Strategies Face First Stress Event

In a February 17 post on X, Lighter announced changes to its LLP infrastructure, splitting liquidity into separate strategies for different market types, including RWAs. Risk, liquidations, and auto-deleveraging are now handled at the strategy level rather than across the entire pool.

That structure faced what the platform called its “first battle test” on February 26. According to Lighter, a trader had built a large long position in ARC perpetuals over several days, with around 600 other traders and market makers taking the short side and pushing total open interest to $50 million.

ARC perp trading was assigned to Strategy #7, a high-risk strategy with about $75,000 in allocated USDC. Lighter said this meant only that portion of LLP deposits could be exposed if auto-deleveraging occurred.

As ARC’s price fell around 6 p.m. ET on February 26, the large long position was first liquidated on the order book for roughly $2 million. Lighter said LLP was initially in profit on the position, but further downside depleted Strategy #7, triggering another ADL at 0.071123. In the end, the whale lost about $8.2 million, LLP lost its capped $75,000 allocation, and short traders who held their positions were profitable.

ARC Price Collapse

The unwind left visible scars on the ARC price chart, with data from CoinGecko showing the token experienced a flash crash in the early hours of February 27, sliding from around $0.031 to $0.025 before recovering to $0.0348.

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At the time of writing, ARC, which powers the Ryzome agentic AI “app store,” was down over 9% in 24 hours and nearly 59% across seven days. The token has also lost more than 63% of its value in the past two weeks, as well as falling 42% over 30 days. It currently sits 95% below its January 2025 all-time high of $0.62, having shed nearly 88% off its price in the past year.

This turbulence matches up with observations from crypto commentator Simon Dedic, who noted that ARC’s value had dipped overnight by about 80% on volumes approaching $400 million, which was nearly ten times its fully diluted valuation.

Dedic pointed out that before dumping, the token had been “massively outperforming” despite a weak market, even suggesting it had been “heavily manipulated.”

The concerns raised by Dedic echo a broader industry debate about market integrity. Just last month, Base co-founder Jesse Pollak rejected the idea of behind-the-scenes manipulation, stating his team won’t coordinate or deploy capital to influence prices because markets “deserve to be free, open, and fair.”

TLDR:

• The U.S. Treasury confirmed a $745 million TIPS buyback on February 25, 2026, as part of routine debt management.
• The $2.7 billion weekly repurchase operation accounts for less than 0.008% of the total $35 trillion national debt.
• Treasury buybacks have been used since 2002 to improve bond market liquidity and manage maturity structure efficiently.
• The repurchase reshuffles existing debt obligations but does not cancel principal or alter the broader fiscal debt outlook.
  

U.S. Treasury buyback operations came into focus on February 25, 2026, as the government confirmed a $745 million repurchase of Treasury Inflation-Protected Securities (TIPS).

The transaction was part of a broader $2.7 billion repurchase program executed that same week. The bonds involved fall within a 2027–2036 maturity range.

While the action reflects active portfolio management, analysts note it does not reduce the national debt. The total U.S. debt currently exceeds $35 trillion.

Treasury Buyback Functions as a Routine Portfolio Management Tool

The U.S. Treasury buyback program has been in active use since 2002. Over recent years, the program has been expanded to meet growing bond market demands.

The primary goal is to enhance liquidity in older, less actively traded bond issues. These operations also help smooth refinancing cycles and manage interest rate exposure.

Paul White Gold Eagle noted on X that the $2.7 billion weekly operation represents less than 0.008% of total outstanding debt.

The $745 million TIPS repurchase amounts to roughly 0.00002% of the total federal debt load. These figures make clear that the buyback operates within a narrow financial scope. It does not translate into any measurable reduction in overall debt.

Treasury officials describe the buyback as a tool to improve functioning in bond markets. The operation also aims to maintain stability within secondary markets for government securities.

By targeting bonds in the 2027–2036 maturity range, the Treasury manages its future refinancing schedule. This approach is designed to reduce rollover risk over the medium term.

The buyback ultimately reshuffles existing obligations within the Treasury’s broader issuance strategy. It does not cancel debt or reduce the principal amount owed to bondholders.

Rather, it adjusts the composition of outstanding securities in circulation. This distinction matters when assessing the true fiscal result of such operations.

Structural Debt Concerns Stay Unchanged After the Repurchase

The broader debt picture remains a pressing concern for fiscal observers and analysts. The national debt now surpasses $35 trillion and continues on an upward path.

A $745 million repurchase barely registers against that scale of obligation. The gap between buyback size and total debt volume remains enormous.

Without long-term spending reform or meaningful revenue adjustments, the debt trajectory stays the same. Portfolio adjustments are not a substitute for genuine fiscal consolidation measures.

Treasury repurchase operations serve operational and technical goals, not fiscal reduction ones. Debt reduction requires legislative action and structural policy changes.

As Paul White Gold Eagle stated, this action “is not debt cancellation.” It remains a standard liquidity and portfolio management tool.

The buyback does improve technical efficiency within bond markets during periods of tighter financial conditions. However, it leaves the macro debt outlook fundamentally unchanged.

Market observers continue watching Treasury operations closely for signals of any broader fiscal strategy. For now, the $745 million repurchase remains a routine technical adjustment within existing programs.

It reflects the Treasury’s ongoing effort to manage the maturity structure of current obligations. The national debt trajectory, however, continues on its present course without alteration.

Tarek Mansour, the co-founder of prediction market Kalshi, provided an update, following the platform’s decision to void some positions that were opened after the death of Iran’s Supreme Leader Ayatollah Ali Khamenei was confirmed.

“We don’t list markets directly tied to death. When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death. That is what we did here,” Mansour said in a post on X.

Iranian state media reported the death early Sunday, after an attack launched by Israel and the United States a day earlier.

Kalshi is reimbursing all fees from the “Ali Khamenei out as Supreme Leader” market, and will pay traders with positions open before Khamenei died according to the “last-traded price before his death,” Mansour said. 

Additionally, users who opened positions after the death of Khamenei were reimbursed the difference between the higher price paid for entry and the last traded price.

A Kalshi spokesperson told Cointelegraph that the platform’s policy on not allowing “death markets” is clear and long-standing.

The platform reiterated the policy on Saturday, and Mansour said that the death carveout stipulations were clearly stated in the rules for the market. However, the decision sparked backlash from users online, who accused the platform of curtailing user profits.

Related: Kalshi bans US politician over alleged insider trading violation

Suspicions of insider trading activity on prediction market platforms rise amid geopolitical tensions

In February, six traders on rival prediction market Polymarket netted about $1 million betting that the US would initiate a strike on Iran before the end of the month.

All six wallets were created in February, mostly bet on markets related to a strike on Iran, and some of the positions were filled hours before the first explosions were heard over the Iranian capital of Tehran, according to Bloomberg.

The trading patterns raised suspicion of insider trading activity among onchain investigators and analysts.

In January, US President Donald Trump announced that the individual who leaked information tied to the raid and capture of former Venezuelan President Nicolás Maduro had been arrested by US law enforcement.

The comments fueled speculation from onchain analysis platform Lookonchain that the leaker Trump was referencing may have been linked to winning bets on Polymarket placed shortly before the US raid in Caracas.

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