Crypto Winter Began at the Start of 2025
Matt Hougan, Chief Investment Officer at Bitwise, stated that the crypto market entered a bear phase as early as January 2025, and we may now be nearing the end of this downturn rather than just beginning.
The crypto community has only recently acknowledged this reality, but the market has long been in a deep slump. Bitcoin has fallen 39% from its October 2025 peak, while Ethereum has dropped 53%, with many other assets performing even worse.
ETF and DAT Inflows Concealed True Market Conditions
Since the start of 2025, crypto assets have clearly diverged in performance:
- Group One (BTC, ETH, XRP): Modest declines between 10.3% and 19.9%
- Group Two (SOL, LTC, LINK): Standard bear market declines of 36.9% to 46.2%
- Group Three (ADA, AVAX, SUI, DOT): Sharp drops ranging from 61.9% to 74.7%
The key difference among these groups lies in whether they received institutional support:
- Group One benefited from significant ETF and DAT inflows
- Group Two received ETF approvals in 2025
- Group Three relied solely on native crypto capital
Institutional Flows Propped Up Market Levels
Group One assets received extraordinary institutional backing. For instance, ETFs and DATs purchased approximately 744,417 Bitcoin in 2025, worth around $75 billion.
Without this inflow, Bitcoin might have fallen by as much as 60%. In reality, the broader crypto market has been in a severe downturn, with select assets appearing resilient only due to institutional support.