Matt Hougan, Chief Investment Officer at Bitwise Asset Management, has presented a compelling case that the broader cryptocurrency market may have already passed through its bear phase, despite recent dramatic price declines. Hougan argues the latest downturn, which began in early 2025, did not play out evenly across the market.
Institutional demand, primarily from spot Bitcoin ETFs and corporate treasuries, acted as a stabilizing force for flagship assets like Bitcoin and Ethereum, absorbing selling pressure that would have caused deeper collapses in prior cycles. Consequently, while Bitcoin has shed about 39% from its October 2025 all-time high and Ethereum over 50%, the most severe losses of 60-75% were concentrated in "lower-quality" altcoins and tokens lacking sustained institutional backing.
Hougan describes the period since January 2025 as a "full-blown winter," likening it to a harsh, prolonged ordeal. He points to classic late-cycle signals: the Crypto Fear & Greed Index sitting at an extreme fear reading of 9, grinding lower prices, and total exhaustion among traders. "With this one starting early 2025, he argues we’re closer to the thaw than the freeze," potentially setting up for a rebound "sooner rather than later" as capitulation exhausts itself.
The analysis comes on the heels of a violent market session on February 5, which saw Bitcoin plunge as much as 15-17% intraday to briefly touch lows near $60,000-$63,000, triggering over $2 billion in futures liquidations. The global crypto market cap has shed over $1 trillion in recent weeks and up to $2 trillion from its October 2025 peak near $4.379 trillion.
Looking ahead, Hougan suggests the market's structure has fundamentally changed. The next phase is unlikely to be a broad-based rally. Instead, capital is becoming more selective, favoring networks with real-world usage, strong activity, and durable fundamentals. This signifies a maturation of the asset class, marked by a gradual transition where early investors reduce exposure and institutional players increasingly step in as buyers.
In a notable parallel development, Binance has been actively accumulating Bitcoin amidst the turmoil, executing its $1 billion SAFU (Secure Asset Fund for Users) conversion plan. The exchange has completed two recent $100 million batches, swapping stablecoins for roughly 2,630 BTC total, a move some interpret as a strategic accumulation at discounted levels and a response to intense FUD (Fear, Uncertainty, and Doubt) targeting the exchange.
