Bitwise Report: Crypto Fundamentals Are Getting Stronger Despite Third Straight Negative Quarter
Bitwise’s Q2 2026 crypto market assessment exhibits its 10 Large Cap Crypto Index dropped 15.4% final quarter, the third straight quarter within the pink and the longest such stretch since 2022.
However, the identical report argued that at the same time as costs fell, the crypto sector, together with stablecoins, tokenized property, and prediction markets, has been strengthening.
Crypto Prices Down, But Fundamentals Are Improving
According to Bitwise, eight of the index’s 10 constituents finished Q2 within the pink, with the worst performer within the basket being Cardano (ADA), which slipped almost 40% in Q2 and is down greater than 56% 12 months up to now. Ethereum and XRP misplaced 24.66% and 20.79% of their values, respectively, whereas Solana’s dip was extra modest compared at 10.87%, though YTD it registered a extra vital 40.61% plunge.
Bitcoin itself simply suffered its worst June in 4 years after falling under $60,000 and was about 49% off its October 2025 all-time high of over $126,000 on the time of writing, stretching the downturn to about 9 months.
But there have been two property within the Large Cap Crypto Index that bucked the downward development: Hyperliquid (HYPE) and Stellar Lumens (XLM), with the previous going up 79% and the latter over 10%. However, year-to-date XLM dumped 6.71% whereas HYPE nonetheless stayed inexperienced, surging by almost 158%.
A separate report from CryptoQuant indicated that about 40% of altcoins are buying and selling close to their all-time lows, a share that climbed towards 45% when BTC broke under the aforementioned $60,000.
Per the Bitwise market assessment, on-chain exercise, buying and selling quantity, and the full worth locked (TVL) in DeFi additionally slipped. But it was not all doom and gloom, as prediction market volumes reached a document $43.2 billion through the quarter, which is nearly 18 occasions greater than the 12 months earlier than.
Meanwhile, tokenized real-world property have gone up greater than 50% to this point this 12 months to just about $33 billion, and crypto-focused equities have additionally outperformed the broader digital asset market, with the Bitwise Crypto Innovators 30 Index gaining 30.6%.
The asset supervisor additionally famous that stablecoins settled 2.3 occasions extra worth than Visa and collectively maintain extra US Treasuries than the likes of Norway, India, Brazil, and Saudi Arabia. Further, it identified that income era amongst crypto functions has grow to be extra concentrated, with Hyperliquid, PancakeSwap, and Aave every producing roughly $900 million over the previous 12 months.
A Market Twice the Size It Was on the Last Bottom
When Bitwise in contrast present exercise ranges to the identical level within the 2022 cycle, the distinction stood out away from the value charts. For occasion, Ethereum transaction counts ran about 13 occasions greater, and DeFi TVL sits greater than 60% above the extent from that interval. Additionally, stablecoin property below administration have doubled.
According to the report, solely costs have did not preserve tempo with the growing utilization and infrastructure, with the market now valuing crypto at ranges related to the final bear market, although the business is working at nearly twice the dimensions it had reached then, and there’s higher liquidity and clearer participation from conventional finance corporations.
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