Asset manager Bitwise, through its Chief Investment Officer Matt Hougan, has pointed out that the cryptocurrency market has been submerged in a deep winter since January 2025. According to the recently published report, this bearish cycle, marked by apathy and seller exhaustion, is nearing its conclusion to make way for a solid recovery.
Despite the prevailing pessimism, the firm maintains that the current phase of despair is a historical indicator of the end of downtrends. However, the general feeling of discouragement usually precedes expansion periods, which is why Bitwise estimates that the sector’s rebound will arrive much sooner than retail investors currently expect.
Institutional flows masked the weakness of the retail sector
Throughout much of 2025, the cryptocurrency market experienced a technical dichotomy where institutionally backed assets, such as Bitcoin, showed moderate resilience compared to altcoins. In fact, while ETFs and treasury strategies absorbed more than 740,000 BTC, thereby preventing a major price collapse, retail-oriented tokens suffered crashes exceeding 60%.
On the other hand, Matt Hougan argues that this “winter” cycle has been masked by the massive entry of institutional capital, which prevented the severity of the retreat from being recognized. However, the final capitulation seems to be near, as the exhaustion of selling pressure usually occurs quietly, allowing the market to stabilize before starting a new cycle of vertical growth.
Is it possible that Wall Street adoption will accelerate the end of this bear market?
Furthermore, the report highlights that technological and regulatory fundamentals have not stopped advancing, even though prices do not reflect such progress. Likewise, the expansion of stablecoins and real-world asset tokenization continues to gain ground, being factors that accumulate latent bullish pressure that could be released sharply once sentiment definitively changes direction.
Therefore, Bitwise concludes that the cryptocurrency market is repeating patterns observed in the winters of 2018 and 2022, where investor fatigue marked the turning point. In this way, the industry is preparing for a 2026 that could challenge traditional four-year cycles, relying on a much more mature and diversified financial structure than in past eras.
