TLDR
- Bitwise suggests that Q4 2025 may mark the end of the crypto bear market despite falling prices during the period.
- Ethereum and related networks saw record transaction volumes, indicating increased adoption of blockchain technology.
- Crypto companies experienced earnings growth, outperforming many traditional stock market sectors in Q4 2025.
- Stablecoins reached a new record value of over $300 billion by the end of Q4 2025, showing increased investor confidence.
- DeFi platforms like Uniswap handled more transactions than centralized exchanges, further demonstrating the market’s resilience.
The last quarter of 2025 may have marked a key turning point for the cryptocurrency market, according to a report by Bitwise. Despite falling prices, signs suggest the market’s fundamentals improved significantly. Key metrics such as blockchain activity and corporate earnings showed positive trends, signaling that the industry could be nearing the end of its prolonged downturn.
Crypto Market Shows Stronger Fundamentals in Q4 2025
The final three months of 2025 revealed conflicting signals in the crypto market. While prices fell during the period, other indicators pointed to growth in the industry. Bitwise highlighted that transactions on Ethereum and related networks reached new highs, showing more widespread adoption of the technology. “Ethereum and its related networks handled more transactions than ever before, signaling an increase in user activity,” said Matt Hougan, Bitwise’s investment head.
At the same time, companies within the crypto sector saw earnings rise, outperforming many traditional stock market sectors. This growth was seen across several parts of the industry, from blockchain technology to crypto-related financial services. These developments provide evidence that, despite the price drop, the crypto market’s underlying infrastructure is strengthening.
Stablecoin Growth and Decentralized Finance Support Recovery
Another key indicator of the market’s recovery was the rise in stablecoins. The total market value of stablecoins surpassed $300 billion by the end of Q4 2025, setting a new record. The increased movement and growing investments in stablecoins signaled that investors were becoming more confident in the digital asset space.
In addition, the continued growth of decentralized finance (DeFi) platforms reinforced the market’s resilience. Uniswap, a popular DeFi trading platform, outperformed major centralized exchanges like Coinbase in transaction volume. “That’s the kind of divergence you get at the bottom of bear markets, when sentiment is down but fundamentals are up,” Hougan explained.
The growth in stablecoins and DeFi platforms may serve as strong indicators that the crypto market is beginning to shift. These areas saw consistent development throughout 2025, which could pave the way for a stronger market recovery in 2026.
What Could Drive Crypto Prices Higher in 2026?
Several factors could influence the direction of the crypto market in 2026, according to Bitwise. Among the most anticipated developments is the potential progress of the CLARITY Act, which could provide more regulatory clarity for the industry. Additionally, the appointment of a new Federal Reserve chair and increasing access to crypto funds from major investment firms could further stimulate growth.
The first quarter of 2026 may also bring favorable conditions for riskier investments like cryptocurrencies. VanEck, an investment management firm, believes that a clearer economic outlook and government spending plans will benefit the crypto market. As these factors unfold, the market’s future may become more optimistic in the coming year.
