
Digital assets declined sharply in Q1 2026 due to geopolitical tensions, cautious Federal Reserve policy, and negative institutional flows. Bitcoin fell 22.1% to $68,228, while the CoinDesk 20 Index dropped 27.4%. U.S. spot bitcoin ETFs saw net redemptions of $496 million for the quarter, though March showed $1.32 billion in inflows. On March 17, the SEC and CFTC designated 16 assets including SOL, XRP, and DOGE as digital commodities, removing regulatory uncertainty.