Crypto has been in a complete winter since January 2025, although much of the market has been reluctant to say it out loud, asset manager Bitwise said in a Monday blog post.
Having lived through several crypto winters, the investment manager said the current mood of despair looks familiar and has historically marked the later stages of downturns. After more than a year of falling prices, the market is likely closer to the end of winter than the beginning, with a recovery arriving “sooner than later.”
Crypto winters are prolonged bear markets characterized by steep price drops, collapsing sentiment and a general indifference to good news. Historically, they have followed periods of excessive leverage and speculative excess that lasted about a year from peak to trough.
In previous cycles, including 2018 and 2022, milestones for enactment and legislative progress have done little to stem losses in the depths of the downturn. Instead, crypto winters have tended to end quietly as selling pressure dissipates and markets stabilize, setting the stage for the next expansion, the post said.
Prices have been significantly lower across the board, with bitcoin a decrease of approx. 39% from peak in October 2025, ether from more than 50%, and many major tokens down far more.
This is not a routine pullback or a healthy correction, according to Bitwise CIO Matt Hougan, but a 2022-style downturn driven by excessive leverage and profit-taking that has overwhelmed even a steady stream of positive headlines.
Hougan argued that recognizing the market as a true crypto winter helps explain why good news, from regulatory progress to institutional adoption, has failed to lift prices.
In previous cycles, Hougan noted, fundamentals rarely matter at low market levels. Crypto winters end not with optimism or excitement, but with fatigue as sellers are finally exhausted.
While past crypto winters have lasted about 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, although the market didn’t fully register it at the time. Heavy inflows into spot bitcoin exchange-traded funds (ETFs) and digital asset treasury strategies helped support a handful of large, institutionally accessible assets and masked a brutal bear market in retail-focused crypto.
According to the report, assets with strong institutional backing fell modestly in 2025, while tokens without ETF or treasury demand fell by 60% or more. Bitwise estimated that institutional vehicles absorbed more than 740,000 bitcoins during the period, providing tens of billions of dollars in price support that may have prevented far greater losses.
Despite the gloom, the underlying story for crypto has not significantly worsened, according to Hougan.
Regulatory momentum, Wall Street adoption, stablecoins and tokenization all continue to thrive, though markets are ignoring them for now. The positive news is building latent pressure that could fuel a strong recovery when sentiment turns, the report added.
Read more: Wall Street integration will drive crypto’s next phase, says Fidelity Digital Assets
