Bitwise: “Crypto has likely bottomed…expect rebound as fundamentals recover”

Crypto asset manager Bitwise said it views the fourth quarter of 2025 as the trough of the crypto bear market and is leaning toward the possibility of a market rebound sometime in 2026. While price action was weak, the firm said network activity and real-use metrics showed a clear recovery.

According to Cointelegraph on the 22nd (local time), Matt Hougan, Bitwise’s chief investment officer (CIO), said in a recently released report that “Q4 2025 was a period when strong fundamentals coincided with weak price action,” adding that “this is a classic signal typically seen late in a bear market.”

Hougan cited early 2023 as a comparable case. The crypto market was in a deep slump in the wake of the FTX collapse, but Bitcoin later entered a prolonged rebound phase from around $16,000. “The data were mixed then as well, but the market went on to post a strong uptrend over the following two years,” he said.

Bitwise said structural indicators improved in tandem in Q4 2025, including: △record-high transaction volumes on Ethereum and Layer 2 networks △higher revenues at crypto companies △broader use of decentralized finance (DeFi) △a surge in stablecoin transaction volumes and market capitalization. In particular, the size of the stablecoin market was estimated to have exceeded $300 billion in the fourth quarter.

Prices, however, remained under pressure amid an ongoing correction. Bitwise attributed the divergence to dampened investor sentiment. Hougan said that the fact Uniswap volumes have consistently exceeded Coinbase’s shows “speculative fervor has cooled, but real usage is expanding.”

Views on the market outlook for 2026, however, differ across institutions. Fundstrat expects greater volatility in the first half on tariff policy and geopolitical risks, while VanEck said an easing in fiscal-policy uncertainty and a stabilization in the U.S. economy could create a more favorable backdrop for risk assets.

Bitwise pointed to potential catalysts for a rebound, including progress in discussions over a market-structure bill for the crypto sector (the CLARITY Act), wider use of stablecoins, personnel changes at the U.S. Federal Reserve, and improved access to crypto exchange-traded funds (ETFs) at major brokerages. Hougan added, “Sentiment remains cautious, but fundamentals are already preparing for the next cycle.”