Crypto Winter: When Will the Frostbite Finally End?

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In the grand tapestry of financial folly, Matt Hougan, the illustrious Chief Investment Officer at Bitwise Asset Management, has heralded the onset of what he dramatically dubs a “crypto winter.”

According to his rather theatrical analysis, the icy grip of this crypto winter began in the bleak, cold month of January 2025. Institutional inflows, like mere paper snowflakes, have deceitfully concealed the true depths of our frosty predicament. The pressing question that now gnaws at our collective conscience is: how long will we shiver in this relentless winter?

The Market’s Chilling Whispers of an Ongoing Crypto Winter

In his latest market missive, Hougan unceremoniously dismissed the notion that our recent price sag represents anything as lighthearted as a temporary dip. Rather, he paints the current landscape as a “full-blown crypto winter,” citing the steep, unforgiving drawdowns across the major assets that dance upon the ice.

He draws our attention to Bitcoin (BTC), which has taken a tumble, standing at a staggering 39% below its October 2025 zenith. Ethereum (ETH), the ever-optimistic sibling, has plummeted roughly 53%. And let’s not even mention the altcoins-they’ve nosedived far worse.

“This isn’t just a ‘bull market correction’ or a friendly little dip. No, this is a full-bore, Leonardo-DiCaprio-in-The-Revenant-style crypto winter-ushered in by factors as varied as excess leverage and the OGs cashing in their chips,” he lamented.

Institutional demand, he insists, has played the role of a cunning magician, masking the ugly reality of the downturn. Citing insights from the Bitwise 10 Large Cap Crypto Index, Hougan shines a spotlight on the glaring divide in performance.

Those assets graced with institutional backing-such as Bitcoin, Ethereum, and XRP-have merely skidded modestly since January 2025. Meanwhile, tokens that secured ETF access in 2025, like Solana (SOL), Chainlink (LINK), and Litecoin (LTC), have crumbled into deeper losses.

In stark contrast, the poor souls without any institutional patronage have plummeted between 60% and 75%. As Hougan sagely observes,

“The line of demarcation is simply whether institutions had the good fortune to invest in them.”

During this interminable stretch, exchange-traded funds (ETFs) and Digital Asset Treasuries (DAT) have gobbled up over 744,000 Bitcoins, valued at the jaw-dropping sum of $75 billion. Hougan posits that without such institutional backing, Bitcoin’s losses would have likely been catastrophic.

“Retail crypto has been enduring a merciless winter since January 2025. The institutions just dressed it up nicely for certain assets-like a wolf in sheep’s clothing,” he remarked.

Hougan also tackled a question that has been buzzing among market participants like an annoying fly: why do crypto prices keep spiraling downward despite positive developments like burgeoning institutional adoption, regulatory progress, and Wall Street finally lifting its head from the sand?

His answer? Quite simply, in the heart of a crypto winter, good news tends to slip through the cracks, utterly ignored.

“For those who have traversed the crypto winters of yore-be it 2018 or 2022-you’ll remember that in the depths of winter, good news is as useful as a snow shovel in a blizzard. Crypto winters don’t conclude in a fanfare; they wrap up in sheer exhaustion,” he added.

However, he suggests that while positive developments often languish unnoticed during bear markets, they do not vanish entirely. Instead, they gather like snowflakes, forming what he calls “potential energy,” waiting for the right moment to fuel a recovery as sentiment daintily begins to thaw.

He pointed to several glimmers of hope that might elevate market sentiment, including robust economic growth that might trigger a wild risk-on rally, a delightful surprise related to the Clarity Act, signs of sovereign Bitcoin adoption, or perhaps just the slow passage of time.

Reflecting on historical cycles, Hougan muses that crypto winters typically last around 13 months. Should this current winter indeed have begun in January 2025, then perhaps the end is tantalizingly near.

Yes. And, I think it’s almost over.

– Matt Hougan (@Matt_Hougan) February 3, 2026

He emphasizes that the prevailing mood of despair and ennui often characterizes the final moments of a crypto winter, asserting that nothing fundamentally about crypto has transformed during this current pullback.

“I believe we shall come roaring back sooner rather than later. After all, winter has clung to us since January 2025. Surely, spring must be just around the corner,” Hougan declared.

The Great Debate: When Did This Crypto Bear Market Begin?

While Hougan traces the bear market’s origins to January 2025, not all analysts are in agreement. Julio Moreno, Head of Research at CryptoQuant, acknowledges the discrepancies in asset performance based on institutional exposure but challenges the timeline.

“I must respectfully disagree with the notion that winter began in January 2025. Bitcoin prices were engaged in a long-term upward tango throughout 2025, reaching new heights in October. The absence of a blow-off top or a positively closed year does not imply a bear market in 2025. The Bitcoin bear market commenced in November 2025, as gleaned from on-chain and market data,” he noted.

The start date, dear reader, is crucial. Historically, crypto winters linger for about 13 months. If the downturn did kick off in January 2025, a spring recovery could be nestled around the corner. However, if Moreno is correct and the market peaked in November 2025, the bear phase may continue to cast its long shadow.

“The timing has implications for when it will end. My current forecast is Q3 2026,” Moreno penned.

Whether recovery arrives early in 2026, as Hougan optimistically predicts, or is delayed until Q3 under Moreno’s timeline, remains shrouded in uncertainty. What is abundantly clear, however, is that the market is entrenched in a rather deep downturn.

History teaches us that these phases do not conclude with a single brave catalyst but rather unfold over time. If past cycles hold any wisdom, the groundwork for the next recovery may very well be stealthily forming beneath the icy surface.

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2026-02-04 14:56