At the time of writing, Bitcoin is almost 40% below the ATH it achieved in October last year, while Ethereum is already 55% below its all-time high in August 2025. Investors’ fears of a “crypto winter” seem to be coming true. That is the view of Matt Hougan, chief investment officer at Bitwise, who said that the crypto winter began in January 2025.
Hougan argued that institutional flows into spot bitcoin ETFs and corporate treasuries cushioned those assets but left much of the market in a more serious situation.
In his analysis, he asserts that concentrated institutional demand shifted where liquidity and downside risk materialized, leaving non-institutional tokens exposed to steeper losses and greater slippage. What does this mean? Let’s look at more details to understand the situation.
Hougan’s argument: Are we already in a crypto winter?
Hougan drew on performance data from the Bitwise 10 Large Cap Crypto Index to raise a structural question. To do so, Hougan took three groups of assets: those with sustained institutional demand — bitcoin, ether, and XRP — fell by around 15% during the period he cited. In the second group, tokens that gained ETF approval during 2025 suffered greater declines, around 39% to 46%. On the other hand, tokens without institutional investment channels fell more than 60% during the same period, a dispersion that, according to Hougan, reflects where purchasing power was concentrated.
“We have been in the midst of a crypto winter since January 2025,” Hougan said, adding that the recession was due to excessive leverage and profit-taking, even though institutional purchases masked the severity of the situation for certain assets. However, to reassure investors and crypto enthusiasts, Bitwise’s CIO assured that we are “closer to the end than the beginning.”
Hougan estimated that, historically, crypto winters last about 13 months from peak to trough, and predicted that this cycle could end in early 2026, meaning we could be facing an imminent market recovery. That opinion contrasts with that of CryptoQuant’s director of research, Julio Moreno, who responded directly to Matt Hougan’s analysis, saying that the bear market began in November 2025 and is expected to persist until the third quarter of 2026.
I agree with most of what Matt writes here, specially how he categorizes crypto assets by how much institutional exposure they have and their difference in performance.
I disagree with the winter starting in January 2025. Bitcoin prices remained in a long-term upward trend… https://t.co/hFmfZAiof9
— Julio Moreno (@jjcmoreno) February 3, 2026
What will happen now?
For crypto investors and treasury managers, the issues to analyze are capital rotation and risk-adjusted returns: how much liquidity to allocate to ETF-driven markets versus decentralized funds, and how to structure investment portfolios if the downward dispersion persists. Hougan’s timeline implies that the current consolidation would allow speculators to be eliminated before cash flow demand reasserts itself; Moreno’s view implies a longer period of moderate volumes and tighter risk premiums.
Traders should pay attention to where liquidity is concentrated and how quickly flows normalize across different markets. As long as the market shows negative returns, as it has for more than three months, investors should carefully analyze their next moves, although if Hougan’s prediction comes true, we are facing a great buying opportunity.