Bitwise Says Bitcoin Bear-Market Bottom Is Rising as Institutional Investor Base Expands

Bitwise said the current Bitcoin bear market is structurally different from past cycles, with a broader institutional investor base helping raise the floor under prices.

Juan Leon, a senior investment strategist at the crypto asset manager, told The Block in a report published July 9 that client conversations have changed. “In 2022, clients asked whether crypto could survive,” he said. “In 2026, they are asking about entry points and position sizing. It’s a completely different conversation.”

Leon called the current downturn the mildest structural bear market on record. Bitcoin is down about 50% from its peak, versus 78% in the 2022 bear market and 84% in 2018. The bottom has risen in every cycle, he said, as the asset matures and marginal holders shift from retail speculators to professional managers.

He said further declines remain possible. Past bear markets typically lasted 12 to 13 months, while the current downturn is in its eighth month. Leon pointed to oversold momentum indicators, unrealized losses for about half of Bitcoin holders, renewed accumulation by long-term holders and record net outflows from spot Bitcoin ETFs in June as signs a bottom may be forming.

Leon said the crypto market’s weakness reflects the macro backdrop more than fundamentals. Sticky inflation has damped expectations for interest-rate cuts, while geopolitical tensions have added to uncertainty. The artificial intelligence boom is also pulling in billions of dollars that might otherwise have gone into crypto. Since April, semiconductor-related ETFs have drawn about $12 billion, while more than $4 billion has flowed out of spot Bitcoin ETFs.

He also said AI and crypto are shifting from competitors to complements. As agentic AI begins to rely on programmable money, machine-to-machine payments and stablecoin infrastructure, the overlap between the two sectors is widening. Once expectations for AI capital spending are absorbed and relative valuations converge, asset managers will look for assets down 50% from their highs where fundamentals are improving, Leon said.

Leon also flagged the Clarity Act, a US crypto market-structure bill, as a key variable. The legislation would create a framework allowing trillions of dollars in new institutional capital, he said. Passage before Congress begins its August recess appears unlikely, but institutional participation would increase sharply if the bill becomes law. Matt Hougan, Bitwise’s chief investment officer, has also said recently that the crypto market may be nearing the end of the current bear cycle.