Bitwise: Crypto has likely bottomed… expects rebound on improving fundamentals

Bitwise, a digital-asset manager, assessed the fourth quarter of 2025 as the trough of the crypto bear market and leaned toward the possibility of a market rebound sometime in 2026. While price action was weak, its analysis found clear improvement in network activity and real-world usage indicators.

According to Cointelegraph on the 22nd (local time), Bitwise Chief Investment Officer (CIO) Matt Hougan said in a recently released report that “Q4 2025 was a period in which strong fundamentals and weak price action appeared simultaneously,” adding that “this is a classic signal typically seen late in a bear market.”

Hougan cited early 2023 as a similar case. At the time, the crypto market was in deep slump in the aftermath of the FTX collapse, but Bitcoin later entered a sustained 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 next two years,” he said.

Bitwise said multiple structural indicators improved at the same time in Q4 2025, including: △record-high transaction volumes on Ethereum and Layer 2 networks △rising revenues at crypto companies △expanded use of decentralized finance (DeFi) △a surge in stablecoin trading volumes and market capitalization. In particular, the size of the stablecoin market was tallied at more than $300 billion as of the fourth quarter.

On the price front, however, the correction continued. Bitwise attributed the divergence to weakened investor sentiment. Hougan said that “the fact that Uniswap’s trading volume is consistently exceeding Coinbase’s shows that speculative fervor has cooled, but usage-based adoption is expanding.”

Outlooks for 2026, however, differ by institution. Fundstrat expects increased volatility in the first half due to tariff policy and geopolitical risks, while VanEck said an environment supportive of risk assets could take shape, citing easing fiscal-policy uncertainty and a stabilizing U.S. economy.

As potential catalysts for a rebound, Bitwise pointed to progress in discussions on the crypto market-structure bill (the CLARITY Act), broader stablecoin adoption, personnel changes at the U.S. Federal Reserve, and greater access to crypto exchange-traded funds (ETFs) via major brokerages. “Sentiment is still cautious, but the fundamentals are already preparing for the next cycle,” Hougan added.