Bitwise CIO Warns Market Is Facing A ‘Full-Bore’ Crypto Winter, Not A Pullback
Bitwise Chief Investment Officer Matt Hougan has launched a brand new evaluation of the present state of the crypto market, arguing that the business has been firmly entrenched in a bear marketplace for over a yr.
In a report shared on social media, Hougan acknowledged that his analysis signifies the present downturn started as early as January 2025, regardless of widespread optimism fueled by institutional adoption, regulatory progress, and Bitcoin’s (BTC) rally to new all-time highs.
Deep Bear Market Driving Crypto?
Posting on X, previously Twitter, Hougan pushed again towards the concept latest value weak point represents a routine pullback or quick‑time period dip. Instead, he described the present surroundings as a full‑scale crypto winter akin to previous downturns in 2018 and 2022.
Interestingly, Hougan mentioned the crypto market presently resembles a “2022‑like, Leonardo‑DiCaprio‑in‑The‑Revenant‑model” winter, pushed by extreme leverage constructed up in the course of the prior cycle and heavy revenue‑taking by lengthy‑time crypto holders.
Hougan addressed a query many buyers have been asking: why costs proceed to fall regardless of a gradual stream of constructive developments.
He pointed to increasing institutional involvement, improving regulation, and broader adoption as clear lengthy‑time period positives, however mentioned none of that usually issues in the course of the deepest part of a bear market.
According to Hougan, crypto winters are intervals when excellent news is essentially ignored, no matter its significance. Even developments equivalent to Wall Street companies hiring aggressively or main banks like Morgan Stanley growing their crypto publicity are unlikely to spark a rally within the quick time period.
He additionally cited market sentiment indicators to help his view. Hougan famous that the Crypto Fear and Greed Index stays close to traditionally high ranges of worry, even because the newly appointed Federal Reserve (Fed) chair is publicly supportive of Bitcoin.
To him, this disconnect underscores how deeply damaging sentiment has develop into. Drawing on previous cycles, Hougan mentioned crypto winters hardly ever finish with renewed pleasure or optimism. Instead, they usually conclude when buyers are exhausted and disengaged.
ETF Support Propped Up Bitcoin?
Looking to historical past, Hougan noticed that earlier crypto winters have lasted roughly 13 months. Bitcoin reached its peak in December 2017 earlier than bottoming a yr later, and once more peaked in October 2021 earlier than hitting its low level in November 2022.
By that measure, the present cycle would possibly recommend extra ache forward, significantly since Bitcoin peaked once more in October 2025. However, Hougan argued that focusing solely on that date misses a important element.
In his view, the present winter truly started in January 2025 however was partially hidden by extraordinary institutional inflows. He mentioned robust demand from change‑traded funds (ETFs) and Digital Asset Treasuries (DATs) masked underlying weak point throughout a lot of the crypto market.
Hougan emphasised the size of institutional help for Bitcoin specifically, calling it unprecedented. During the interval he analyzed, ETFs and DATs collectively bought greater than 744,000 BTC, representing roughly $75 billion in shopping for stress. He urged that with out this help, BTC’s value may have fallen by as a lot as 60%.
Despite this, Bitwise CIO urged a number of doable catalysts that would assist raise sentiment and mark the start of a crypto restoration, together with robust world financial progress that reignites threat urge for food, progress on the CLARITY Act, early indicators of sovereign adoption of Bitcoin, or just the passage of time.
Reflecting on his expertise via a number of crypto market cycles, he mentioned the present temper of despair, fatigue, and malaise carefully resembles the ultimate levels of previous crypto winters.
Featured picture from OpenArt, chart from TradingView.com