New Zealand crypto traders move to Bitcoin & stablecoins in Q1

Binance New Zealand has published its Q1 2025 Crypto Market Insights Report, outlining substantial shifts in trading behaviour among New Zealand investors in response to global market instability and macroeconomic uncertainty.

The report records that the first quarter of 2025 began on a positive note for cryptocurrency markets, building on record highs from the previous year, which were driven by increasing institutional involvement, the launch of Bitcoin exchange-traded funds, and expectations for favourable regulatory developments.

Early optimism was fuelled by the inauguration of U.S. President Donald Trump, whose administration initially indicated support for cryptocurrency, including prospective talks around a national Bitcoin reserve. This sentiment, however, was rapidly reversed in February following the announcement of significant U.S. tariffs on imports from countries including Canada, Mexico, and China, stoking concerns of fresh global trade disputes.

These developments were compounded by a substantial hack targeting the Bybit crypto exchange, resulting in a reported loss of USD $1.5 billion. The combination of increased tariffs and the security breach precipitated a notable market sell-off as the total global cryptocurrency market capitalisation declined by over 20%, from USD $3.6 trillion to USD $2.8 trillion that month. Traditional equity markets also experienced parallel declines, reflecting a broad mood of risk aversion across asset classes.

Market instability was heightened by further delays in the proposed establishment of a national Bitcoin reserve in the United States. These uncertainties contributed to a 16 percent drop in the value of Bitcoin between 24 and 26 February, representing its sharpest decline since the collapse of FTX in 2022. The volatility was sustained in March as additional reciprocal tariffs were flagged by the U.S. administration, causing Bitcoin to briefly lose 19 percent of its value. Ethereum's decline was even more pronounced at over 40 percent, and speculative tokens such as those linked to artificial intelligence and internet memes saw losses in excess of 50 percent. By quarter's end, the global crypto market had lost an estimated USD $1 trillion from its January peaks.

James Quinn-Kumar, Director of Community Engagement at Binance New Zealand, provided comment on the shifting landscape: "The quarter began strongly, driven by institutional enthusiasm and hopes for regulatory clarity. However, global macroeconomic events quickly reminded traders of crypto's volatility, prompting many to pivot strategically toward more stable, fundamental assets like Bitcoin and stablecoins."

New Zealand traders mirrored global tendencies by reallocating capital into blue-chip cryptocurrencies during periods of market turbulence. Bitcoin remained the most traded asset on Binance New Zealand, while demand for stablecoins such as USDT and USDC increased notably. The report notes that the market capitalisation of stablecoins achieved an all-time high of USD $204 billion during the quarter.

XRP rose in prominence to become the second-most traded digital asset among Kiwi investors, overtaking its ranking in global markets. The report attributes this to perceived real-world use cases, particularly following XRP's inclusion in the U.S. Strategic Crypto Reserve.

Quinn-Kumar elaborated on investors' changing attitudes: "The pullback in hype-driven trading, like the memecoin frenzy, indicates a maturing perspective among Kiwis. We're seeing our community here choose stability and fundamentals over short-term fads when volatility picks up. The fact that stablecoins and Bitcoin usage are rising indicates a move back towards established cryptocurrencies and lower-volatility assets, while still maintaining involvement in the market through strategic asset rotation."

The period also saw a significant reduction in speculative trading activity. January was marked by the launch and high trading volumes of political tokens such as $TRUMP, which at one stage attracted trading interest from nearly two-thirds as many users as Bitcoin on Binance New Zealand. As global events weighed on investor sentiment in February and March, Kiwi trading volumes in memecoins dropped by 40 percent compared to the final quarter of the previous year. Tokens including $TRUMP, PEPE, and SHIB were supplanted in the top-traded rankings by larger cryptocurrencies like Ethereum and Bitcoin, as well as major stablecoins.

Quinn-Kumar commented on the cultural effect of speculative tokens: "The memecoin phenomenon undeniably brought crypto discussions into mainstream discourse. Even as enthusiasm faded amid volatility, it significantly raised public awareness and sparked conversations around crypto's role in finance and investment strategies."

The report also notes that Binance was the most downloaded crypto trading application in New Zealand during Q1 2025, with 16,800 new installs. Download numbers peaked in January, reflecting the impact of ongoing political developments and their influence on public engagement with cryptocurrencies.