Cryptocurrencies have been in the middle of winter since January 2025, even if much of the market has been reluctant to say it out loud, asset manager Bitwise said in a blog post on Monday.
Having been through multiple crypto winters, the investment manager said the current mood of desperation seems familiar and has historically marked the later stages of recessions. 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 drops, collapse sentiment, and a general indifference to good news. Historically, periods of overleverage and speculative excess have followed, lasting about a year from their peak to their trough.
In previous cycles, including 2018 and 2022, adoption milestones and regulatory progress did little to stem losses in the depths of the recession. Instead, crypto winters have tended to end quietly, as selling pressure fades and markets stabilize, setting the stage for the next expansion, according to the publication.
Prices have dropped considerably across the board, with bitcoin down about 39% from its October 2025 peak, ether discount of over 50%, and many major tokens dropped much lower.
According to Bitwise CIO Matt Hougan, this is neither a routine pullback nor a healthy correction, but rather a 2022-style recession driven by excess 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 the good news, from regulatory progress to institutional adoption, has failed to lift prices.
In past cycles, Hougan noted, fundamentals rarely mattered at market lows. Crypto winters end not with optimism or enthusiasm, but with fatigue, as sellers are finally exhausted.
While previous crypto winters lasted approximately 13 months from peak to trough, Hougan believes this cycle effectively began in January 2025, even though the market did not fully register it at the time. Strong inflows into spot bitcoin exchange-traded funds (ETFs) and digital asset treasury strategies helped prop up a handful of large institutionally accessible assets, masking a brutal bear market in retail-focused cryptocurrencies.
According to the report, assets with strong institutional support fell modestly in 2025, while tokens without ETF or treasury demand suffered drops of 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 much larger losses.
Despite the pessimism, the underlying story of cryptocurrencies has not materially deteriorated, according to Hougan.
Regulatory momentum, Wall Street adoption, stablecoins, and tokenization continue to advance, even if markets ignore them for now. That positive news is generating latent pressure that could fuel a strong recovery once sentiment changes, the report added.
Read more: Wall Street integration will fuel next phase of crypto, says Fidelity Digital Assets
