Crypto Winter Is Here – and It’s Closer to Thawing Than You Think

• Matt Hougan says crypto has been in a prolonged downturn since early 2025.
• Institutional flows masked losses, while regulatory uncertainty weighs on sentiment.
• Hougan believes the cycle is advanced, bringing a potential recovery closer.

Crypto markets have been in a sustained downturn since January 2025, according to Bitwise chief investment officer Matt Hougan, despite ongoing signs of institutional engagement. 

Hougan describes the period as a full crypto winter rather than a short-term pullback, citing broad-based price weakness across the market. Bitcoin has fallen 39% from its October 2025 peak, while Ethereum has declined 53%, with many other digital assets recording larger losses.

Hougan argues that institutional activity masked the depth of the downturn throughout much of 2025. Assets accessible through exchange-traded funds or digital asset treasuries declined less sharply than tokens without institutional channels. During this period, ETFs and treasuries acquired 744,417 Bitcoin, valued at about US$75 billion (AU$108 billion), providing significant price support.

He says this support obscured the fact that retail-focused segments had already entered a prolonged winter. Despite falling prices, Hougan maintains that progress in regulation, stablecoins and tokenisation has continued beneath the surface.
Related: Is Quantum Uncertainty Cracking Bitcoin’s Store-of-Value Narrative?

Why Regulation Now Matters More

Regulatory uncertainty has intensified following delays to the CLARITY Act, which Bitwise considers central to cementing a pro-crypto policy environment. Bitwise reported that market-implied odds of the bill passing fell from 80% in early January to around 50% after industry pushback. 

Hougan argues that without legislative clarity, crypto must demonstrate real-world utility through widespread adoption of stablecoins and tokenised assets.

Bitwise expects a sharp rally if a workable version of the bill passes, while failure would likely produce a slower, utility-driven recovery. Drawing on past cycles, Hougan says crypto winters tend to end after prolonged exhaustion rather than renewed optimism. Because the current downturn began earlier than many realised, he believes the market may already be closer to its eventual thaw.

Related: Bitcoin Breaks Key Support as Bears Circle Below $80K

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