The crypto market may be deeper into a downturn than many investors realize. According to Bitwise Chief Investment Officer Matt Hougan, the current phase should be seen as a full-blown “crypto winter” that began back in January 2025 — not just a short-term correction.
In a recent report, Hougan said the market’s weakness has been masked by strong institutional demand, especially from Bitcoin exchange-traded funds (ETFs) and corporate digital asset treasuries. While this wave of buying has helped prevent a sharp crash in prices, it hasn’t been enough to shift the overall negative mood hanging over the market.
Hougan compared the current environment to previous crypto winters in 2018 and 2022, periods that followed overheated bull markets. In his view, the downturn is being driven by the usual post-boom forces: too much leverage built up during the previous cycle and heavy profit-taking by long-term holders who cashed out after years of gains. These factors, he argues, often create long periods of sideways or falling prices, even when positive news continues to emerge.
That disconnect between good headlines and weak price action is a familiar feature of deep bear markets. Hougan pointed out that growing institutional involvement, gradual regulatory progress, and broader crypto adoption have failed to lift sentiment in any meaningful way. Market indicators reflect this mood. The Crypto Fear and Greed Index, a popular gauge of investor emotion, remains stuck near historically high levels of fear, suggesting many traders are still bracing for more downside.
History offers some context for how long this phase could last. Previous crypto winters have typically stretched for around 13 months. Bitcoin topped out in December 2017 before finding a bottom roughly a year later. A similar pattern played out in the last cycle, with Bitcoin peaking in October 2021 and hitting its low point in November 2022. Hougan believes the current downturn follows a familiar rhythm, even if the surface-level price action looks more stable than in past crashes.
One key reason prices haven’t collapsed further is the steady flow of institutional money. According to the report, ETFs and digital asset treasuries together accumulated more than 744,000 Bitcoin during the period under review. Hougan estimates that without this buying pressure, Bitcoin’s price could have fallen by as much as 60%. In other words, large buyers have softened the blow, but they haven’t been able to reverse the broader downtrend in sentiment.
Looking ahead, Hougan outlined several potential triggers that could help the market turn a corner. These include stronger global economic growth that could revive appetite for risk assets, progress on the CLARITY Act in the U.S., early signs of sovereign nations adding Bitcoin to their reserves, or simply the passage of time as the market works through its late-stage winter phase.
For now, though, Hougan says the dominant feeling across the crypto space is one of exhaustion and pessimism — a mood that, in past cycles, has often marked the final stretch before a slow and uneven recovery begins.
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