Bitwise CIO Warns Market Is Facing A ‘Full-Bore’ Crypto Winter, Not A Pullback

Ben Graham · February 4

Bitwise Chief Investment Officer Matt Hougan has released a new analysis of the current state of the crypto market, arguing that the industry has been firmly entrenched in a bear market for over a year.

In a report shared on social media, Hougan stated that his research indicates the current downturn began as early as January 2025, despite widespread optimism fueled by institutional adoption, regulatory progress, and Bitcoin’s (BTC) rally to new all-time highs.

Deep Bear Market Driving Crypto?

Posting on X, formerly Twitter, Hougan pushed back against the idea that recent price weakness represents a routine pullback or short‑term dip. Instead, he described the current environment as a full‑scale crypto winter comparable to past downturns in 2018 and 2022.

Interestingly, Hougan said the crypto market currently resembles a “2022‑like, Leonardo‑DiCaprio‑in‑The‑Revenant‑style” winter, driven by excessive leverage built up during the prior cycle and heavy profit‑taking by long‑time crypto holders.

Hougan addressed a question many investors have been asking: why prices continue to fall despite a steady stream of positive developments.

He pointed to expanding institutional involvement, improving regulation, and broader adoption as clear long‑term positives, but said none of that typically matters during the deepest phase of a bear market.

According to Hougan, crypto winters are periods when good news is largely ignored, regardless of its significance. Even developments such as Wall Street firms hiring aggressively or major banks like Morgan Stanley increasing their crypto exposure are unlikely to spark a rally in the short term.

He also cited market sentiment indicators to support his view. Hougan noted that the Crypto Fear and Greed Index remains near historically high levels of fear, even as the newly appointed Federal Reserve (Fed) chair is publicly supportive of Bitcoin.

To him, this disconnect underscores how deeply negative sentiment has become. Drawing on past cycles, Hougan said crypto winters rarely end with renewed excitement or optimism. Instead, they typically conclude when investors are exhausted and disengaged.

ETF Support Propped Up Bitcoin?

Looking to history, Hougan observed that previous crypto winters have lasted roughly 13 months. Bitcoin reached its peak in December 2017 before bottoming a year later, and again peaked in October 2021 before hitting its low point in November 2022.

By that measure, the current cycle might suggest more pain ahead, particularly since Bitcoin peaked again in October 2025. However, Hougan argued that focusing solely on that date misses a critical detail.

In his view, the current winter actually began in January 2025 but was partially hidden by extraordinary institutional inflows. He said strong demand from exchange‑traded funds (ETFs) and Digital Asset Treasuries (DATs) masked underlying weakness across much of the crypto market.

Hougan emphasized the scale of institutional support for Bitcoin in particular, calling it unprecedented. During the period he analyzed, ETFs and DATs collectively purchased more than 744,000 BTC, representing roughly $75 billion in buying pressure. He suggested that without this support, BTC’s price could have fallen by as much as 60%.

Despite this, Bitwise CIO suggested several possible catalysts that could help lift sentiment and mark the beginning of a crypto recovery, including strong global economic growth that reignites risk appetite, progress on the CLARITY Act, early signs of sovereign adoption of Bitcoin, or simply the passage of time.

Reflecting on his experience through multiple crypto market cycles, he said the current mood of despair, fatigue, and malaise closely resembles the final stages of past crypto winters.