The fourth quarter of 2025 may have quietly marked the end of the crypto bear market, according to a new report from digital asset manager Bitwise. While prices remained muted, underlying fundamentals showed significant improvement.
Bitwise Chief Investment Officer Matt Hougan drew parallels with early 2023, when prices appeared stagnant but the market was beginning to recover after the collapse of FTX. Bitcoin rebounded from lows near $16,000 to almost $98,000 by early 2025. Hougan sees a similar divergence between sentiment and fundamentals emerging in late 2025.
Key indicators from Q4 2025 suggest a market bottom may be forming. Ethereum and layer-2 networks saw transaction volumes reach record highs, while crypto-focused companies reported revenues outpacing many traditional sectors. Stablecoin market capitalization also surpassed $300 billion, marking a new milestone.
Decentralized finance adoption strengthened further, with platforms like Uniswap consistently processing more transaction volume than Coinbase. Hougan said this pattern—weak sentiment but rising fundamentals—is typical at the bottom of bear markets.
Analysts remain split on the outlook for 2026. Fundstrat’s Tom Lee cautioned that macroeconomic headwinds, such as trade tensions and political uncertainty, could weigh on markets. In contrast, VanEck expects the first quarter to favor “risk-on” assets like crypto, citing U.S. economic stabilization and fiscal clarity.
Bitwise noted several catalysts that could boost crypto markets in 2026, including progress on the CLARITY Act, continued stablecoin growth, the appointment of a new Federal Reserve chair, and broader access to crypto ETFs through major wirehouses.
Overall, despite the subdued prices in Q4 2025, growing on-chain activity, adoption metrics, and revenue trends suggest the market may be setting the stage for a bullish 2026.
