Bitwise CIO: Crypto Winter Deepens Despite Institutional Support

In a report shared on social media, Bitwise’s Matt Hougan pushed back against characterizing recent crypto price weakness as a routine pullback. Instead, he described the environment as a full-scale “crypto winter,” specifically likening it to a “2022-like, Leonardo-DiCaprio-in-The-Revenant-style” downturn. Hougan’s research dates the start of this bear market to January 2025, a timeline that conflicts with the widespread optimism fueled by Bitcoin’s rally to new all-time highs and institutional adoption narratives at the time.

Hougan addressed the central paradox puzzling many investors: why prices continue to fall amid positive developments like expanding institutional involvement from firms such as Morgan Stanley, improving regulation, and broader adoption. His analysis is clear: during the deepest phase of a bear market, good news is largely ignored regardless of its long-term significance. He noted that even developments like Wall Street firms hiring aggressively or a publicly supportive Federal Reserve chair are unlikely to spark a short-term rally, underscoring the market’s current disconnect from fundamentals.

To support his view of deeply entrenched negative sentiment, Hougan cited market sentiment indicators, particularly the Crypto Fear and Greed Index. He noted the index remains near historically high levels of fear. This persistence of fear, even in the face of a Bitcoin-supportive Fed chair, underscores a profound market malaise. According to Hougan, this emotional and psychological exhaustion is a hallmark of crypto winters, which rarely end with renewed excitement but instead conclude when investors are fully exhausted and disengaged.

Drawing on historical cycles, Hougan observed that previous crypto winters, such as those following the peaks in December 2017 and October 2021, lasted roughly 13 months. By that measure, with Bitcoin having peaked again in October 2025, the current cycle might suggest more pain ahead. However, Hougan argues this timeline is misleading because the true beginning of the downturn was masked by an extraordinary external factor: unprecedented institutional buying pressure.

Hougan emphasized a critical detail often missed in cycle analysis: the current winter began in January 2025 but was partially hidden by massive institutional inflows. He highlighted the scale of support for Bitcoin via exchange-traded funds (ETFs) and Digital Asset Treasuries (DATs), calling it unprecedented. During the period he analyzed, these vehicles collectively purchased more than 744,000 BTC, representing roughly $75 billion in buying pressure.

This institutional demand, Hougan suggested, acted as a powerful prop under Bitcoin’s price. He posited that without this extraordinary support from ETFs and DATs, BTC’s price could have fallen by as much as 60% from its levels, revealing far deeper weakness across the broader crypto market. This analysis frames the current price action not as a market standing on its own fundamentals, but as one being artificially supported during a period of underlying retail and leveraged investor exhaustion.

Despite the grim assessment, Hougan identified several potential catalysts that could help lift sentiment and mark the beginning of a crypto recovery. These include strong global economic growth reigniting risk appetite, legislative progress on the CLARITY Act, early signs of sovereign nation adoption of Bitcoin, or simply the passage of time allowing investor fatigue to fully run its course.

Reflecting on his experience through multiple market cycles, Hougan concluded that the current mood of despair, fatigue, and malaise closely resembles the final stages of past crypto winters. While the unprecedented institutional support for Bitcoin has altered the dynamics of this cycle, the core emotional arc—from greed to fear to exhaustion—remains a defining feature. For investors, the message is that recovery may hinge less on daily headlines and more on the gradual dissipation of the leverage-driven excesses from the prior cycle.