TLDR
- Bitwise says crypto has faced a full-scale winter since January 2025
- Bitcoin is down 39% from its October 2025 peak, Ethereum over 50%
- ETFs absorbed 740,000 BTC in 2025, propping up institutional assets
- Bitwise believes seller fatigue may signal a market recovery soon
The crypto market has been quietly enduring a harsh winter since January 2025, according to Bitwise Asset Management. While institutional investments in ETFs and treasury strategies have provided some support, retail crypto assets have seen steep declines. Bitwise believes this prolonged downturn resembles past cycles, where markets bottom out not with optimism but with exhaustion—suggesting that the end of the current crypto winter may be closer than many realize.
Market Weakness Dates Back to Early 2025
Bitwise Asset Management reported that the crypto market has been in a full winter phase since January 2025. The firm says that although many investors did not recognize it at the time, the signs were already present.
In a recent blog post, Bitwise stated that the downturn has been prolonged and severe, similar to previous cycles. Chief Investment Officer Matt Hougan explained that crypto winters are defined by sustained price drops, collapsing sentiment, and weak response to positive news.
Institutional Support Masked Retail Losses
Hougan noted that large inflows into bitcoin ETFs and digital asset treasury strategies helped conceal a broader market decline. According to Bitwise, over 740,000 bitcoin were absorbed by institutional products in 2025. This capital helped support the price of bitcoin and other large-cap assets.
However, tokens without ETF or institutional backing fell much harder. Many retail-focused assets declined by 60% or more. Hougan said this divergence created the appearance of market stability, when in reality, retail investors were facing steep losses.
Seller Fatigue May Mark End of Crypto Winter
Bitwise believes the current mood in the market resembles previous late-stage bear markets. Hougan wrote that market cycles rarely turn on good news alone, but rather when sellers are exhausted and pressure fades.
“Crypto winters do not end with excitement, but with fatigue,” he stated. Bitwise sees signs that this fatigue is setting in now, suggesting that the downturn may be close to bottoming out.
According to previous cycles in 2018 and 2022, these market phases typically last about 13 months from peak to trough. With the current cycle starting in January 2025, a turning point could arrive in the coming months.
Positive Developments Overlooked by Market
Despite falling prices, Bitwise argues that the broader fundamentals of the crypto sector have not weakened. Hougan pointed to ongoing regulatory progress, Wall Street involvement, and advancements in stablecoins and tokenization.
He added that these trends are continuing in the background, even if the market is not responding to them. The report said that this unrecognized progress could lead to a swift recovery once market sentiment changes.
Hougan emphasized that it is important to view the current phase for what it is—a full-scale crypto winter. He believes accepting this reality makes it easier to understand why prices have fallen despite encouraging news.
