Bitwise insists crypto bear market bottomed out in Q4 2025 despite falling prices

The final three months of 2025 might have marked a turning point for crypto, even though prices didn’t show it, according to a Wednesday report from Bitwise, a company that handles digital assets.

Matt Hougan, who oversees investments at Bitwise, told clients that the last quarter created a puzzling situation. While the value of cryptocurrencies fell during most of the period, other measurements showed the industry getting stronger.

Activity from users, information recorded on blockchains, and money earned by companies all went up.

Similar pattern seen after FTX collapse

Hougan drew comparisons to early 2023, right after the FTX exchange went under. Back then, crypto seemed stuck even though things were actually getting better behind the scenes. Bitcoin climbed from around $16,000 to roughly $98,000 by the beginning of 2025.

“At the time, we were starting to rebound post-FTX, and the data was topsy-turvy; some up, some down, some sideways,” Hougan said. “In the two years that followed, crypto prices soared.”

The same split between how people felt and what the numbers showed happened again at the end of 2025, according to Hougan. Prices dropped, but important signs of health across the crypto world jumped higher.

Experts don’t agree on what comes next. Tom Lee from Fundstrat thinks economic problems like trade tariffs and political questions could hurt markets through most of 2026 before things pick up late in the year.

VanEck sees it differently, expecting the first three months of 2026 to be good for riskier investments like crypto because of clearer government spending plans and a steadier American economy.

Four signs point to market recovery

Hougan pointed to four developments from the fourth quarter that support his view about the market hitting bottom.

Ethereum and related networks handled more transactions than ever before, showing more people actually using the technology. Companies focused on crypto made more money than many regular stock market sectors.

Stablecoins, digital currencies tied to the dollar, saw big increases. The total value of all stablecoins passed $300 billion in the fourth quarter, reaching a new record high. People moved more stablecoins around, and more money flowed into them throughout 2025.

The growth of decentralized finance completed the picture. Hougan mentioned Uniswap, a trading platform that now handles more transactions than Coinbase on a regular basis.

“That’s the kind of divergence you get at the bottom of bear markets, when sentiment is down but fundamentals are up,” he said.

Bitwise identified several things that could push crypto prices higher in 2026, including movement on the CLARITY Act, more stablecoin growth, a new Federal Reserve chair, and large investment firms giving clients access to crypto funds.

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