Bitwise CIO Says Q3 Crypto Market Was Among Best Ever, Sees Start of New Bull Run

The cryptocurrency market's sharp rebound in the third quarter may mark the start of a new bull run, Bitwise said.

Matt Hougan, Bitwise's chief investment officer, said in a recently released quarterly market report that the third quarter was "one of the best quarters in crypto history," Cointelegraph reported on October 14. He said the market could be entering a so-called "Crypto Spring," the start of a new upcycle.

Bitwise said its large-cap crypto index rose 46.4% in the third quarter. Over the same period, Bitcoin gained 42.3%, Ether climbed 69.1% and Solana advanced 59.2%. All 10 tokens in the index posted double-digit gains, with Chainlink leading the group with a 97.6% surge.

Institutional inflows also rebounded. US spot Bitcoin exchange-traded funds recorded about $6 billion in net inflows in the third quarter, turning cumulative flows for the year positive. Prices, ETF flows and on-chain activity were all improving at the same time, Hougan said.

Tokenized assets and decentralized derivatives also grew. The market value of tokenized stocks rose 65.5% in the third quarter to nearly $3.2 billion. Open interest in decentralized perpetual futures reached a record of about $26 billion. Trading exposure is also expanding beyond cryptocurrencies to include stocks, commodities, foreign exchange and shares of private companies.

Still, the recovery was not evenly spread across the market. Shares of Bitcoin miners Riot Platforms and Hut 8 fell 26.4% and 25.4%, respectively, over the same period, while Galaxy Digital dropped 16.8%. The number of listed companies holding Bitcoin fell about 6% to 173. Public companies holding Ether also declined to 35 from 40. Despite the third-quarter rebound, Bitwise's large-cap crypto index was still down 6.2% for the year as of the end of September.

Bitwise said growth in tokenized assets and decentralized derivatives would likely continue in the fourth quarter. It said billions of dollars in assets could move onto blockchains such as Ethereum and Solana if the US Securities and Exchange Commission adopts an innovation exemption. It also said US investor participation could increase as major platforms including Hyperliquid and Lyra have already topped $6 trillion in cumulative perpetual futures trading volume this year.

"Just three months ago, prices, on-chain activity and ETF flows were all weak," Hougan said. "Now, almost every indicator has turned decisively higher."