Bitwise argues that the crypto industry’s obsession with timing the market bottom overlooks a historical pattern in which peak investor anxiety often signals the start of a recovery.
Having endured the winters of 2018 and 2022, the crypto asset manager suggested that the current “feeling of anxiety” in the market is an indicator of historic recovery zones.
Bitwise CIO Matt Hougan noted that investors who bought the dip during the 2018 nadir saw returns of about 2,000%, while those who got in during the 2022 lows were up about 300% in just over three years. For those with a long-term horizon, the company sees the current disconnect between price and progress as a repeat of these specific cycles.
The global cryptocurrency market has faced a difficult start to 2026, with more than $2 trillion in value wiped out since the October 2025 peak. bitcoin It recently plummeted to a 16-month low near $60,000, a psychological gap that triggered nearly $5.4 billion in leveraged liquidations in a single 72-hour period.
Analysts attributed the carnage to a perfect storm of macroeconomic headwinds: the nomination of Kevin Warsh as Federal Reserve chairman signaling an aggressive shift toward hard money, 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-growth tech stocks.
The world’s largest cryptocurrency was trading around $68,800 at the time of this publication.
According to Friday’s blog post, the fundamental argument for the asset class remains unchanged despite the price action.
Hougan argued that the world is increasingly digital and demanding 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 eventually drive the next leg higher.
Regarding a possible change, Bitwise acknowledged that cryptocurrency bear markets typically end in exhaustion rather than a sudden burst of enthusiasm. However, the asset manager identified several specific triggers that could serve as catalysts for a recovery.
These include the potential passage of the CLARITY Act, a return to market risk sentiment, rising expectations of interest rate cuts, and technological advances at the intersection of AI and cryptocurrencies. In the absence of a sudden positive shock, Bitwise expects the market to “bottom,” prescribing a strategy of patience and a focus on long-term destiny.
Read more: Deutsche Bank says bitcoin selloff indicates loss of conviction, not broken market
