Crypto has been locked in a prolonged winter since early 2025, even if much of the market has avoided calling it that, asset manager Bitwise said in a blog post published Monday.
The firm said the prevailing sense of despair mirrors conditions seen late in past downturns, suggesting the market may be closer to a bottom than to the start of a fresh decline. After more than a year of falling prices, Bitwise said a recovery is likely to emerge “sooner rather than later.”
Crypto winters are extended bear markets characterized by steep price drops, collapsing sentiment and indifference to positive news. They typically follow periods of excessive leverage and speculation and have historically lasted around a year from peak to trough.
In previous cycles, including 2018 and 2022, advances in adoption and regulation failed to stem losses during the deepest phases of the downturn. Instead, Bitwise noted, crypto winters usually end quietly, as selling pressure fades and prices stabilize before the next expansion.
Prices across the market have fallen sharply. Bitcoin is down about 39% from its October 2025 high, ether has lost more than 50%, and many major tokens have posted even larger declines.
Bitwise Chief Investment Officer Matt Hougan said the current drawdown is not a routine correction but a 2022-style selloff driven by excess leverage and profit-taking that has overwhelmed a steady flow of positive headlines.
Viewing the market through the lens of a true crypto winter helps explain why constructive developments, from regulatory progress to institutional adoption, have failed to lift prices, Hougan said.
At market lows, fundamentals tend to matter less, he added. Crypto winters usually end not with renewed optimism, but with fatigue, as sellers are gradually exhausted.
While past crypto winters have lasted roughly 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, even if it was not widely recognized at the time. Heavy inflows into spot bitcoin exchange-traded funds and corporate digital-asset treasury strategies helped support a narrow group of institutionally accessible assets, masking a deeper bear market in retail-oriented tokens.
According to Bitwise, assets with strong institutional backing declined modestly 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 over the period, providing tens of billions of dollars in price support and preventing steeper losses.
Despite the gloom, Bitwise said crypto’s underlying fundamentals have not materially deteriorated. Regulatory momentum, Wall Street participation, stablecoins and tokenization continue to advance, even as markets largely ignore them.
That progress, the firm said, is quietly building pressure for a sharp recovery once sentiment eventually turns.
