Whatever comes next will go a lot better if you take some time to prepare for it.
Bear markets are usually defined as periods when a market is down by at least 20% from a recent high. With that benchmark in mind, over the last couple of months, a popular story has emerged, claiming that the crypto sector’s bull market ended back in January, and that the majority of 2025 has been one long bear market for the entire sector.
Let’s begin by looking at crypto as a whole rather than any single coin.
The global crypto market cap was around $3.8 trillion in mid-January before sliding sharply into the spring. It then recovered to reach a high of $4.3 trillion in early October, only to be devastated by the flash crash early in the month, and now rests at about $3.2 trillion.
Today’s $3.2 trillion level represents something like a 16% slide from the start of the year, and roughly a 23% drop from the October peak. In stock market terms, that does indeed put the whole crypto sector somewhere between a sharp correction and the start of a bear market.
But at the individual coin level, it feels far worse than what that implies.
As you can see, Bitcoin’s performance has been disappointing to most people. Ethereum is in the doldrums again after briefly showing signs of momentum. And Solana slumped despite a significant inflow of tokenized real-world assets (RWAs) to its chain.
In contrast, the stock market is up about 16% in 2025, even after the tariff-driven sell-off earlier in the year, and even amid substantial uncertainty in the economy. When you hold coins that are down double digits while the stock index funds are green, it certainly feels like a crypto bear market.
From here, there are two scenarios to consider.
First, this year’s drawdown so far is simply a reset within a larger uptrend. In this world, the sharp October slide and the recent $1 trillion wipeout in crypto market value are painful but ultimately temporary, and not the start of a multiyear decline. If that’s correct, continuing to accumulate high-quality coins is likely to yield favorable results over a long time horizon.
In the second scenario, the real bear market is still ahead. Crypto has just experienced a period of new exchange-traded funds (ETFs) and supportive policy moves for the first time. Without such catalysts to look forward to, investors could withdraw their capital and redirect it to greener pastures elsewhere. If this scenario proves to be true, the market will be well on its way to the depths of market conditions that crypto natives humorously refer to as “goblin town,” and Bitcoin could fall by as much as another 50%, with altcoins expected to decline by 80% or more.
If the ongoing downturn attenuates into mere doldrums over the next month or so, it suggests that the first scenario is true. The best approach is to continue to dollar-cost average into Bitcoin, Ethereum, Solana, and XRP, as their recovery is likely to be around the corner. It might also be advisable to pick up some other altcoins on deep discounts, if your risk tolerance is high enough for it.
But if the sell-off accelerates or proves to be durable, the second scenario is more likely. Here, taking on risk too quickly with crypto majors or dabbling in altcoin investments is practically guaranteed to be deadly for your portfolio. The right approach is to become far more selective and cautious with your buying activity, and to concentrate your purchasing in proven assets like Bitcoin, which will definitely survive the bear market no matter how rough it gets.
Either way, understand that low prices will not be around for all cryptoassets forever, and if you’re going to be in the market for at least the next five years or so, it’s a better idea to be buying than to be sidelined, even if it feels scary to see prices falling. Bear markets often seem like they’re the worst time to be looking for opportunity, but the truth is that opportunity is always there if you’re willing to plan ahead.
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Alex Carchidi has positions in Bitcoin, Ethereum, SPDR S&P 500 ETF Trust, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.
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