Bitwise CIO Warns Market Is Facing A ‘Full-Bore’ Crypto Winter, Not A Pullback
Bitwise Chief Funding 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 12 months.
In a report shared on social media, Hougan said 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 in opposition to the concept latest worth weak point represents a routine pullback or brief‑time period dip. As an alternative, he described the present atmosphere as a full‑scale crypto winter akin to previous downturns in 2018 and 2022.
Curiously, Hougan mentioned the crypto market at present resembles a “2022‑like, Leonardo‑DiCaprio‑in‑The‑Revenant‑type” winter, pushed by extreme leverage constructed up in the course of the prior cycle and heavy revenue‑taking by lengthy‑time crypto holders.
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Hougan addressed a query many buyers have been asking: why costs proceed to fall regardless of a gentle stream of optimistic developments.
He pointed to increasing institutional involvement, bettering regulation, and broader adoption as clear lengthy‑time period positives, however mentioned none of that sometimes issues in the course of the deepest section of a bear market.
Based on Hougan, crypto winters are durations when excellent news is essentially ignored, no matter its significance. Even developments reminiscent of Wall Road corporations hiring aggressively or main banks like Morgan Stanley growing their crypto publicity are unlikely to spark a rally within the brief time period.
He additionally cited market sentiment indicators to assist his view. Hougan famous that the Crypto Worry and Greed Index stays close to traditionally excessive ranges of concern, even because the newly appointed Federal Reserve (Fed) chair is publicly supportive of Bitcoin.
To him, this disconnect underscores how deeply unfavourable sentiment has change into. Drawing on previous cycles, Hougan mentioned crypto winters hardly ever finish with renewed pleasure or optimism. As an alternative, they sometimes conclude when buyers are exhausted and disengaged.
ETF Help Propped Up Bitcoin?
Seeking 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 12 months 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 counsel extra ache forward, notably since Bitcoin peaked once more in October 2025. Nonetheless, Hougan argued that focusing solely on that date misses a crucial element.
In his view, the present winter really started in January 2025 however was partially hidden by extraordinary institutional inflows. He mentioned sturdy demand from trade‑traded funds (ETFs) and Digital Asset Treasuries (DATs) masked underlying weak point throughout a lot of the crypto market.
Hougan emphasised the dimensions of institutional assist for Bitcoin specifically, calling it unprecedented. Through the interval he analyzed, ETFs and DATs collectively bought greater than 744,000 BTC, representing roughly $75 billion in shopping for strain. He urged that with out this assist, BTC’s worth might have fallen by as a lot as 60%.
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Regardless of this, Bitwise CIO urged a number of potential catalysts that might assist carry sentiment and mark the start of a crypto restoration, together with sturdy world financial progress that reignites danger 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 by 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
