Bitwise sees signs crypto’s harsh winter is almost over

Crypto has been mired in a deep winter since early 2025, even if the market has been slow to acknowledge it, asset manager Bitwise said in a blog post on Monday.

Bitwise said the current atmosphere of pessimism mirrors conditions seen late in past downturns, suggesting the market may be closer to a bottom than the start of a prolonged decline. After more than a year of falling prices, the firm expects the recovery to arrive “sooner rather than later.”

Crypto winters are extended bear markets defined by steep price declines, depressed sentiment, and widespread indifference to positive developments. They typically follow periods of excessive leverage and speculation and have historically lasted roughly a year from peak to trough.

In prior cycles, including 2018 and 2022, advances in adoption and regulation failed to halt losses during the depths of the downturn. Instead, Bitwise noted, crypto winters have usually ended quietly, as selling pressure subsides and markets stabilize before the next growth phase begins.

Prices across digital assets have fallen sharply. Bitcoin is down about 39% from its October 2025 high, ether has slid more than 50%, and many major tokens have posted significantly deeper losses.

According to Bitwise Chief Investment Officer Matt Hougan, the current decline is not a routine pullback but a 2022-style downturn driven by excess leverage and profit-taking, overwhelming even a steady stream of positive headlines.

Hougan said acknowledging the market as being in a true crypto winter helps explain why constructive developments, from regulatory progress to institutional adoption, have failed to support prices.

At market lows, fundamentals tend to matter less, Hougan added. Crypto winters rarely end with renewed optimism, instead concluding when sellers are exhausted and sentiment bottoms out.

While past crypto winters have lasted around 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, even though it was not fully recognized at the time. Strong inflows into spot bitcoin exchange-traded funds and corporate digital asset treasury strategies supported a small group of institutionally favored assets, masking a severe bear market in retail-focused tokens.

Bitwise said assets with strong institutional demand declined modestly in 2025, while tokens without ETF or treasury support suffered losses of 60% or more. The firm estimates institutional vehicles absorbed more than 740,000 bitcoin over the period, providing tens of billions of dollars in price support and limiting broader market damage.

Despite the bleak sentiment, Bitwise said crypto’s long-term fundamentals remain intact. Regulatory momentum, increased Wall Street participation, stablecoin adoption, and tokenization continue to progress, even if markets are currently overlooking those developments.

That buildup of positive fundamentals could set the stage for a sharp recovery once sentiment turns, the firm said.