Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, stated that the cryptocurrency market has been in a prolonged “crypto winter” since January 2025, though signs suggest the downturn may be closer to ending than beginning.
Positive Developments Are Not Reflecting in Prices
In a recent post titled “The Depths of Crypto Winter,” Hougan explained that despite ongoing progress in adoption, regulation, and institutional involvement, the market remains in a severe bear phase. Bitcoin has fallen nearly 39 percent from its October 2025 all-time high, Ethereum is down 53 percent, and many other digital assets have declined even more. He emphasized that this is not a short-term correction but a deep and extended bear market similar to those of 2018 and 2022, driven by excessive leverage and profit-taking by long-term holders.
Hougan noted that developments such as the appointment of a pro-Bitcoin Federal Reserve chair, increased institutional hiring in crypto, and growing adoption by traditional financial firms have had little impact on investor sentiment. He added that “good news doesn’t matter in the depths of winter” and that market recoveries often occur gradually through exhaustion and normalization of sentiment rather than sudden enthusiasm.
Institutional Support Masked True Losses
Institutional flows, including ETFs and Digital Asset Treasuries, helped soften the decline for some large-cap assets. According to Bitwise data, Bitcoin, Ethereum, and XRP only fell between 10 and 20 percent due to this support, while retail-focused tokens such as Solana, Litecoin, Chainlink, Cardano, Avalanche, Sui, and Polkadot suffered losses ranging from 37 to 75 percent. Hougan noted that ETFs and DATs bought over 744,000 Bitcoin, roughly $75 billion in support, which prevented a potential 60 percent decline for BTC since January 2025.
He concluded that several factors indicate the current crypto winter may soon end. Hougan expressed optimism, saying, “I think we’re going to come roaring back sooner rather than later. Heck, it’s been winter since January 2025. Spring is surely coming soon.”
Bitcoin’s Global Position Has Weakened
The market downturn is also reflected in Bitcoin’s standing among global assets. As of February 2, Bitcoin has fallen out of the top ten by market capitalization and now ranks 13th globally. Its market cap has dropped to around $1.56 trillion from roughly $2.35 trillion in July 2025, when it ranked sixth after rallying past $119,000.
