Bitwise CIO says 'full-blown crypto winter' masked by institutional flows now nearer the end than the beginning

Crypto markets have been in a prolonged downturn since early 2025, and the current environment should be understood as a full-blown "Leonardo-DiCaprio-in-The-Revenant-style crypto winter" rather than a temporary correction, according to Bitwise Chief Investment Officer Matt Hougan.

In a memo to clients late Monday, Hougan noted that bitcoin BTC is down around 39% from its October 2025 all-time high, ether ETH has fallen roughly 53%, and many other digital assets have dropped even more sharply.

Expand Chart

The Bitwise CIO argued that the label matters for how investors interpret both price action and sentiment. He described the current phase as comparable to prior crypto winters in 2018 and 2022, driven by factors such as excess leverage and widespread profit-taking by OGs. In those periods, he said, positive developments around adoption or regulation failed to move prices, as bearish sentiment overwhelmed incremental good news.

"Why is the Crypto Fear and Greed Index near all-time high levels of fear when the new Fed chair is a bitcoin fan?" Hougan wrote. "Because we are in a crypto winter."

Expand Chart

When will the end come?

While historical crypto winters have typically lasted about 13 months from peak to trough, Hougan said the current cycle likely began earlier than most investors realized. Although bitcoin peaked in October 2025, he said underlying market weakness set in around January 2025 but was obscured by strong inflows into exchange-traded funds and digital asset treasury vehicles.

Hougan pointed to performance data from the Bitwise 10 Large Cap Crypto Index to illustrate how institutional access shaped outcomes. Assets with sustained institutional demand, such as bitcoin, ether, and XRP, declined by roughly 10% to 20% over the period. Other tokens that gained ETF approval during 2025 experienced deeper losses, while assets without institutional investment channels fell more than 60% — a pattern Hougan said reflects how ETF and treasury buying supported select parts of the market.

According to Hougan, ETFs and digital asset treasuries purchased more than 744,000 BTC during the period, representing roughly $75 billion in demand that helped cushion prices. Without that support, he said, bitcoin's drawdown could have been substantially worse, perhaps around 60%.

Despite the weakness, Hougan said the broader crypto landscape continues to make structural progress, citing advances in regulation, institutional adoption, stablecoins, and tokenization. Drawing on past cycles, he said crypto winters tend to end not with excitement but with exhaustion, adding that the current mix of despair and malaise resembles conditions near prior market bottoms.

While the timing remains uncertain, Hougan believes the market is closer to recovery than further decline, noting that the winter has already lasted more than a year, with strong economic growth, a positive surprise on the Clarity Act, and signs of sovereign adoption for bitcoin among the potential positive catalysts.

"It's always darkest before the dawn," he said.