Bitwise Analysis Suggests Q4 May Have Been The Bear Market Bottom

The fourth quarter of 2025 potentially marked the end of the crypto bear market, according to a new report from crypto asset manager Bitwise.

In the report shared on Wednesday, Bitwise chief investment officer Matt Hougan said that Q4 was full of mixed signals, with the crypto market performing poorly despite strong underlying fundamentals. 

He argued that a similar setup had occurred in the first quarter of 2023, when the prices of crypto assets like Bitcoin (BTC) rebounded from the FTX collapse, climbing from around $16,000 in 2023 to $98,000 by the start of 2025. 

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

However, analysts are divided over what 2026 will bring for the crypto market. Fundstrat head of research Tom Lee thinks the market could struggle for most of the year before taking off in the last few months, given tariffs and political tensions. 

Meanwhile, VanEck has tipped the first quarter of 2026 to be bullish for “risk-on” assets such as crypto, with the firm pointing to a growing sense of clarity around fiscal policy and stabilization in the US. 

However, Hougan said there were four trends seen in the last quarter that could be cause for optimism in the year ahead. 

The first was that Ethereum and layer-2 transactions have been soaring to all-time highs. Second, crypto-native company revenues continued to grow, with Hougan arguing that the sector is now outpacing many traditional industries in the stock market on key growth metrics.

Third, Hougan also pointed to stablecoin transactions and assets under management soaring to new highs in Q4 amid a strong year for the fiat-pegged assets. In Q4, the total stablecoin market cap also breached new all-time high levels above $300 billion.

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Finally, he said that there had been strong decentralized finance (DeFi) adoption, especially with platforms like decentralized exchange Uniswap, which he said “now reliably processes more transaction volume than Coinbase.”  

“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 also said that progress on the CLARITY Act, a stablecoin supercycle, a new US Federal Reserve chair announcement, and three major wirehouses opening up client access to crypto exchange-traded funds could drive crypto higher in 2026. 

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