Crypto has been in a real winter since January 2025, although much of the market is reluctant to say it out loud, asset manager Bitwise said in a blog post on Monday.
Having lived through several crypto winters, the investment manager said the current mood of despair feels familiar and has historically marked the latter stages of downturns. After more than a year of declining prices, the market is likely closer to the end of winter than the beginning, with recovery coming “sooner rather than later.”
Crypto winters are prolonged bear markets marked by sharp price declines, a collapse in sentiment, and a general indifference to good news. Historically, they followed periods of excessive debt and speculative excess, which lasted about a year, from peak to trough.
In previous cycles, including 2018 and 2022, adoption milestones and regulatory progress did little to stem losses during the depths of the recession. Instead, crypto winters have tended to end quietly, as selling pressure fades and markets stabilize, paving the way for the next expansion, the post said.
Prices have been significantly lower across the board, with bitcoin down about 39% from its October 2025 peak, ether by over 50% and many major tokens down much more.
This is not a routine pullback or 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 drive prices higher.
In past cycles, Hougan noted, fundamentals rarely matter when the market hits lows. Crypto winters end not in optimism or enthusiasm, but in fatigue, as sellers eventually become exhausted.
While previous crypto winters lasted about 13 months from peak to trough, Hougan believes this cycle actually began in January 2025, even if the market didn’t fully register it at the time. Large inflows into spot Bitcoin exchange-traded funds (ETFs) and digital asset treasury strategies helped support a handful of large, institutionally accessible assets, masking a brutal bear market in retail-focused crypto.
According to the report, assets with strong institutional support fell slightly in 2025, while tokens without ETFs or treasury demand suffered declines of 60% or more. Bitwise estimates that institutional vehicles absorbed more than 740,000 bitcoins during this period, providing tens of billions of dollars of price support that could have avoided much greater losses.
Despite the gloom, the underlying crypto story has not materially deteriorated, according to Hougan.
Regulatory dynamics, Wall Street adoption, stablecoins, and tokenization continue to advance, even if markets ignore them for now. This positive news creates latent pressure that could fuel a strong recovery once sentiment changes, the report adds.
Learn more: Wall Street Integration Will Fuel Next Phase of Crypto, Says Fidelity Digital Assets
