Bitwise says crypto is approaching the end of a punishing winter

Crypto has been locked in a prolonged winter since January 2025, even if much of the market has been reluctant to acknowledge it, asset manager Bitwise said in a blog post published Monday.

According to Bitwise, the depth of pessimism now gripping the market closely resembles the later stages of previous downturns. Having navigated multiple crypto winters, the firm said history suggests that after more than a year of falling prices, the market is likely closer to the end of the cycle than the beginning, with a recovery arriving “sooner rather than later.”

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

In past cycles, including 2018 and 2022, progress on adoption and regulation did little to halt losses at the depths of the downturn. Instead, Bitwise said, crypto winters tend to end quietly as selling pressure fades and prices stabilize, laying the groundwork for the next expansion.

Prices have fallen sharply across the market. Bitcoin is down roughly 39% from its October 2025 peak, ether has dropped more than 50%, and many major tokens have suffered far steeper declines.

This is not a routine pullback or a healthy correction, Bitwise Chief Investment Officer Matt Hougan said, but a downturn similar to 2022 — driven by excess leverage and profit-taking that has overwhelmed even a steady stream of positive headlines.

Hougan argued that recognizing the current environment as a true crypto winter helps explain why good news, from regulatory progress to rising institutional adoption, has failed to lift prices.

At market lows, fundamentals tend to matter less, Hougan said. Crypto winters rarely end with optimism, but with exhaustion, as sellers eventually run out.

While previous crypto winters have lasted roughly 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, even though many investors failed to recognize it at the time. Strong inflows into spot bitcoin exchange-traded funds and corporate digital asset treasury strategies helped support a narrow group of institutionally accessible assets, masking the severity of the broader retail-driven bear market.

According to Bitwise, assets with heavy institutional backing declined modestly in 2025, while tokens without ETF or treasury demand fell by 60% or more. The firm estimates that institutional vehicles absorbed more than 740,000 bitcoin during the period, providing tens of billions of dollars in price support that may have prevented deeper losses.

Despite the bleak sentiment, the long-term outlook for crypto has not materially worsened, Hougan said. Regulatory momentum, Wall Street adoption, stablecoins, and tokenization continue to advance, even if markets are ignoring those developments for now.

That accumulation of positive fundamentals, Bitwise said, is building latent pressure that could drive a sharp recovery once sentiment begins to turn.