Crypto has been in a deep winter since January 2025, even if many market participants have been reluctant to call it that, asset manager Bitwise said in a blog post published Monday.
Drawing on experience from multiple past downturns, Bitwise said the prevailing sense of despair looks familiar and has historically signaled the later stages of a crypto winter. After more than a year of declining prices, the firm believes the market is likely closer to the end of the cycle than the beginning, with a recovery arriving “sooner rather than later.”
Crypto winters are extended bear markets characterized by sharp price declines, collapsing sentiment, and broad indifference to positive news. They typically follow periods of excessive leverage and speculation and have historically lasted about a year from peak to trough.
In previous cycles, including 2018 and 2022, progress on adoption and regulation did little to stop losses at the depths of the downturn. Instead, Bitwise said, crypto winters have tended to end quietly, as selling pressure fades and markets stabilize ahead of the next expansion.
Prices across the market have fallen sharply. Bitcoin is down roughly 39% from its October 2025 high, ether has dropped more than 50%, and many major tokens have suffered significantly deeper losses.
This is not a routine pullback or a healthy correction, according to Bitwise Chief Investment Officer Matt Hougan, but a downturn resembling 2022, driven by excess leverage and profit-taking that has overwhelmed even a steady flow of positive headlines.
Hougan said recognizing the current environment as a true crypto winter helps explain why regulatory progress and institutional adoption have failed to support prices.
At market lows, fundamentals rarely matter, Hougan added. Crypto winters typically end not with renewed optimism, but with fatigue, as selling pressure is eventually exhausted.
While previous crypto winters have lasted around 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, even though it went largely unrecognized at the time. Heavy inflows into spot bitcoin exchange-traded funds and corporate digital asset treasury strategies helped support a narrow set of institutionally accessible assets, masking a broader retail-led bear market.
According to Bitwise, assets with strong institutional backing saw relatively modest declines in 2025, while tokens without ETF or treasury demand fell by 60% or more. The firm estimates institutional vehicles absorbed more than 740,000 bitcoin during the period, providing tens of billions of dollars in price support that likely prevented steeper losses.
Despite the prevailing gloom, Hougan said the underlying fundamentals for crypto have not materially deteriorated. Regulatory momentum, Wall Street adoption, stablecoins, and tokenization continue to advance, even if markets are ignoring those developments for now.
That accumulation of positive fundamentals, Bitwise said, could fuel a sharp recovery once sentiment begins to shift.
