Bitwise Chief Investment Officer: The Deepest Night Is Upon Us, and the Dim Light of the Crypto Market Is Just Ahead
Original Article Title: The Depths of Crypto Winter
Original Article Author: Matt Hougan, Chief Investment Officer at Bitwise
Original Article Translation: Chopper, Foresight News
The bad news is: We have been in a crypto winter since January 2025. The good news is: We are likely closer to the end of winter than we are to the beginning.
I want to state the obvious because I believe it can help you make advantageous decisions in the coming months: We are squarely in the midst of a crypto winter.
I find it remarkable that few are discussing this online and in the mainstream media, but it is an undeniable fact. Bitcoin is down 39% from its October 2025 high, Ethereum is down 53%, and many other crypto assets have seen even greater declines.
It is important to recognize it for what it is. This is not a bull market pullback, nor is it a mere dip. This is a full-blown, 2022-like, harsh winter, akin to the one Leonardo DiCaprio endured in "The Revenant," with causes ranging from excessive leverage to early players taking profits on a large scale, and so on.
For me, acknowledging and accepting this fact has made everything incredibly clear.
Why is the crypto price dropping despite continuous positive news in areas such as adoption and regulation? Because we are in the deep waters of crypto winter. Why is the new Fed Chair a Bitcoin supporter while the crypto fear and greed index is in the fearful zone at historic highs? Because we are in a crypto winter.
Those who have lived through the past winters of 2018 or 2022 will remember that in the depths of winter, positive news is meaningless. We will not see a rebound because Wall Street is hiring in droves or Morgan Stanley is doubling down on crypto. While these developments are significant in the long run, they are irrelevant now. The crypto winter will not end in fervor; it will only conclude in exhaustion.
So, when will this winter end? The good news is: I believe we are nearing the finish line.
Historical Patterns of Crypto Winter
A crypto winter typically lasts about 13 months. For example, Bitcoin peaked in December 2017 and bottomed out in December 2018; it peaked in October 2021 and bottomed out in November 2022.
Based on this cycle projection, we still have a difficult period to go through. After all, Bitcoin peaked in October 2025, are we supposed to wait until November 2026? I don't think so.
Upon further analysis of the current winter, I increasingly realize that it actually began in January 2025. The reason we didn't see it is because the influx of ETF and Digital Asset Treasury (DAT) company funds covered up the truth.
ETF and DAT Fund Flows Masked the 2025 Winter
Take a close look at this chart showing the performance of the Bitwise Top 10 Large-Cap Crypto Index constituents since January 1, 2025.
YTD Performance of Bitwise Top 10 Large-Cap Crypto Index Constituents in 2025. Source: Bitwise Asset Management
They are clearly divided into three categories:
· The first category of assets (BTC, ETH, XRP) performed decently, falling 10.3% to 19.9%
· The second category of assets (SOL, LTC, LINK) experienced a typical bear market, falling 36.9% to 46.2%
· The third category of assets (ADA, AVAX, SUI, DOT) was brutally hit, plummeting 61.9% to 74.7%
The core difference among these three categories of assets lies essentially in whether institutions had channels to invest in them. The first category of assets received massive ETF/DAT funding throughout the year; the second category of assets saw ETF approval in 2025; the third category of assets never did. (Note: XRP is an exception, as it did not have an ETF in early 2025 but performed well. The reason might be that XRP was facing a life-or-death lawsuit by the U.S. SEC in early 2025, which was withdrawn, leading to a significant asset rebound.)
The scale of institutional funding support is astonishing. For instance, during the period shown in the chart, ETFs and DATs accumulated purchases of 744,417 Bitcoins, valued at around $75 billion. Just imagine, without this $75 billion floor, where would Bitcoin have fallen to? I estimate it would have dropped by around 60%.
The retail market has been in a brutal winter since January 2025. It's just that institutional funding has at times masked this fact for some assets.
It's Always Darkest Before the Dawn
What we need to remember right now is that there are plenty of real-world positives in the crypto space. Regulatory progress is real, institutional adoption is real, stablecoins and asset tokenization are real, and Wall Street's embrace is real.
In a bear market, positives are ignored but not erased. They are stored up as potential energy. Once the storm clouds clear and market sentiment normalizes, this stored energy will be unleashed in a retaliatory manner. What can clear the storm clouds? Strong economic growth leading to a broad-based risk asset rally, positive signals from the Clarity Act, signs of sovereign nations adopting Bitcoin, or simply the passage of time.
As a veteran of multiple crypto winters, I can tell you that the feeling before the end of a winter is very similar to now: despair, helplessness, gloom. But the current market pullback has not changed the fundamentals of the crypto market one bit.
I believe we will bounce back faster and harder. After all, winter started in January 2025. Spring is definitely not far away.
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