Global crypto adoption slumps amid macro pressures, Turkey defies downtrend
The cryptocurrency sector experienced a notable downturn in the first quarter, as the confluence of macroeconomic and geopolitical headwinds led to a decline in retail trading activity. According to TRM Labs' Q1 Global Crypto Adoption Index, retail crypto volumes plummeted 11% year-over-year, reaching $979 billion. This marked the second consecutive quarter of contraction, with the decline being the most pronounced since the 2022 bear market.
A multitude of factors contributed to the slump, including the strengthening of the US dollar, rising interest rates, and a prevailing risk-averse environment, all of which hindered retail participation. This decrease in demand was accompanied by a 22% decline in the value of Bitcoin (BTC) during the quarter, which followed a peak of over $126,000 in late 2025. The price of Bitcoin trended downward throughout the first quarter, mirroring the broader decline in digital asset markets.
A review of Bitcoin's quarterly returns from Q4 2022 to Q1 2026 reveals a complex landscape. Meanwhile, a growing divergence in crypto adoption has emerged across different regions. Advanced economies, including the United States, South Korea, the United Kingdom, and Germany, witnessed significant declines in trading volumes, largely due to the speculative nature of crypto in these markets. The outbreak of the Iran war in late February further exacerbated this trend, as investors became increasingly sensitive to geopolitical developments and sought alternative investments.
In contrast, emerging markets where cryptocurrency serves a more practical purpose, such as payments and savings, demonstrated greater resilience. Turkey, for instance, saw a 7% year-over-year increase in volumes, while Latin America and South Asia maintained relatively stable activity levels. Venezuela, in particular, has emerged as a key growth market for crypto adoption, driven by the need for alternative financial systems amidst ongoing sanctions. TRM Labs noted that this disparity in demand is rooted in the distinct roles that cryptocurrency plays in different economies, with crypto often serving as a store of value and shadow dollar system in markets with constrained monetary policy or limited alternative investment options.