Bitwise argues that the crypto industry’s obsession with timing a market bottom overlooks a historical pattern where peak investor anxiety often signals the start of a recovery.
Having navigated the winters of 2018 and 2022, the crypto asset manager suggested that the current “anxious feeling” in the market is a trailing indicator of historical recovery zones.
Bitwise CIO Matt Hougan noted that investors who bought the dip during the 2018 nadir saw returns of roughly 2,000%, while those who got in below the 2022 lows are up about 300% in just over three years. For those with a long-term horizon, the company views the current disconnect between price and progress as a repeat of these specific cycles.
The global crypto market has faced a rough start to 2026, with over $2 trillion in value wiped out since peaking in October 2025. Bitcoin recently plummeted to a 16-month low near $60,000, a psychological breach that triggered nearly $5.4 billion in leveraged liquidations over a single 72-hour window.
Analysts attributed the carnage to a perfect storm of macro headwinds: the nomination of Kevin Warsh to chair the Federal Reserve that signaled a hawkish money shift, massive outflows from U.S. spot exchange-traded funds (ETFs) totaling billions and a broader de-risking trend that has seen investors flee both digital assets and high-tech growth stocks.
The world’s largest cryptocurrency was trading around $68,800 at the time of publication.
According to Friday’s blog post, the fundamental case for the asset class remains unchanged despite the price action.
Hougan argued that the world is increasingly digital and in demand for non-fiat currencies, pointing to the rise of stablecoins, the rise of tokenization and the rise of prediction markets and “AiFi” as evidence of a maturing ecosystem.
He emphasized that while prices do not currently reflect this progress, Wall Street’s continued integration with blockchain technology suggests that fundamentals will ultimately drive the next stage up.
Regarding a potential reversal, Bitwise acknowledged that crypto bear markets typically end in exhaustion rather than a sudden burst of excitement. However, the asset manager identified several specific triggers that could serve as a catalyst for a recovery.
These include the potential passage of the CLARITY Act, a shift back to risk on market sentiment, rising expectations for interest rate cuts, and technological breakthroughs at the intersection of AI and crypto. In the absence of a sudden positive shock, Bitwise expects the market to “grind a bottom”, prescribing a strategy of patience and focus on the long-term destination.
Read more: Deutsche Bank says bitcoin’s selloff signals a loss of conviction, not a broken market
