The fourth quarter of 2025 may have marked the end of the crypto bear market, according to a new report from digital asset manager Bitwise.
In the report released Wednesday, Bitwise Chief Investment Officer Matt Hougan noted that Q4 delivered mixed signals, with cryptocurrency prices struggling despite what he described as strong underlying fundamentals.
Hougan said a similar pattern emerged in early 2023, when crypto markets began recovering from the FTX collapse. At that time, Bitcoin rebounded from roughly $16,000 and went on to climb to about $98,000 by early 2025.
“We were beginning to recover after FTX, and the data was inconsistent — some indicators were rising, others falling, and some moving sideways,” Hougan said. “Over the following two years, crypto prices surged.”
“That’s happening again here. In fact, the report shows a unique split, with strong growth on many fundamental statistics—and major pullbacks on price.”
Analysts remain divided on what 2026 will hold for the crypto market. Fundstrat’s Head of Research, Tom Lee, expects the sector to face headwinds for much of the year before rallying in the final months, citing the impact of tariffs and ongoing political tensions.
By contrast, VanEck has forecast a bullish first quarter of 2026 for “risk-on” assets such as cryptocurrencies, pointing to increasing clarity around fiscal policy and signs of economic stabilization in the United States.
Hougan said several developments in the fourth quarter point to growing optimism for the year ahead. He highlighted four key trends that emerged during the period.
First, transaction activity on Ethereum and layer-2 networks surged to all-time highs, while revenues generated by crypto companies continued to outpace those of other sectors in the equity market.
He also noted that stablecoin usage accelerated sharply in Q4, with both transaction volumes and assets under management reaching record levels following a strong year for fiat-pegged digital assets. During the quarter, total stablecoin market capitalization surpassed $300 billion for the first time.
In addition, Hougan pointed to robust growth in decentralized finance, particularly on platforms such as the decentralized exchange Uniswap, which he said now consistently processes more transaction volume than Coinbase.
“That’s the kind of divergence you typically see near the bottom of bear markets, when sentiment remains weak but fundamentals are improving,” Hougan said.
Bitwise added that several potential catalysts could push crypto markets higher in 2026, including progress on the CLARITY Act, a stablecoin supercycle, the appointment of a new US Federal Reserve chair, and major wirehouses opening client access to crypto exchange-traded funds.
