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 rally.
Having weathered the winters of 2018 and 2022, the crypto asset manager suggested that the current “feeling of anxiety” in the market is a leading indicator of historic recovery zones.
Bitwise CIO Matt Hougan noted that investors who bought on the dip during the 2018 dip saw returns of around 2,000%, while those who entered during the 2022 dip are up around 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 had a rough start to 2026, with over $2 trillion in value wiped since the October 2025 peak. Bitcoin recently plummeted to a 16-month low near $60,000, a psychological breach that triggered nearly $5.4 billion in leveraged liquidations in a single 72-hour window.
Analysts have attributed the carnage to a perfect storm of macroeconomic headwinds: the appointment of Kevin Warsh as chairman of the Federal Reserve, signaling a hard currency shift, massive outflows from U.S. spot exchange-traded funds (ETFs) totaling billions, and a broader trend of de-risking that has seen investors flee both digital assets and high-growth technology stocks.
The world’s largest cryptocurrency was trading around $68,800 at press time.
According to Friday’s blog post, the fundamental arguments for the asset class remain unchanged despite the price action.
Hougan argued that the world is increasingly digital and demands non-fiat currencies, pointing to the ascendancy of stablecoins, the rise of tokenization and the emergence of prediction markets and “AiFi” as evidence of a maturing ecosystem.
He pointed out that while prices do not currently reflect this progress, Wall Street’s continued integration with blockchain technology suggests that fundamentals will eventually drive the next move higher.
As for a potential reversal, Bitwise acknowledged that cryptocurrency bear markets usually end in exhaustion rather than a sudden burst of enthusiasm. The asset manager has, however, identified several specific triggers that could serve as a catalyst for a recovery.
These include the potential passage of the CLARITY Act, a return to risk sentiment in the market, growing expectations for interest rate reductions, and technological breakthroughs at the intersection of AI and crypto. Absent a sudden positive shock, Bitwise expects the market to “bottom,” prescribing a strategy of patience and focus on the long-term destination.
Learn more: Deutsche Bank says bitcoin selloff signals loss of conviction, not broken market
