Bitwise CIO Says Crypto Winter Masked by ETF Flows May Be Ending Soon

TLDR

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Bitcoin is down 39% from its October 2025 high despite institutional inflows.
Ether has dropped 53% while non-institutional tokens fell over 60%.
ETFs and treasuries bought over 744,000 BTC, equal to $75 billion in demand.
Crypto winter began January 2025 and now shows signs of exhaustion, says Hougan.

Crypto has been in a “full-blown winter” since early 2025, says Bitwise CIO Matt Hougan, though strong institutional flows have masked deeper market weakness. Now, with most assets still down sharply from their peaks, Hougan believes the worst may be over as exhaustion replaces fear.

Crypto Winter Started in January 2025

Matt Hougan, Chief Investment Officer at Bitwise Asset Management, stated that the current market has been in a crypto winter since January 2025. Though Bitcoin reached a new high in October 2025, he noted that underlying weakness began much earlier in the year.

🚨MARKETS: CRYPTO WINTER IS ENDING SAYS LEADING INVESTOR!
According to Matt Hougan, Chief Investment Officer at @BitwiseInvest, he believes the market is closer to a recovery than to a decline.
He believes, per The Block, that we have been in a savage crypto winter since early… https://t.co/E7pECH2iWD pic.twitter.com/aEpOZXItUE
— BSCN (@BSCNews) February 3, 2026

He shared this view in a memo to clients, adding that the downturn was masked by strong institutional buying. This included inflows from exchange-traded funds (ETFs) and digital asset treasuries. According to Hougan, these flows hid the real scale of losses across most of the crypto market.

Institutional Flows Helped Support Key Assets

Hougan pointed out that ETFs and treasuries purchased over 744,000 BTC during this period. He estimated that this represented around $75 billion in demand. Without this support, Bitcoin’s drop could have been closer to 60%, rather than the current 39%.

The memo also shared data from the Bitwise 10 Large Cap Crypto Index. Bitcoin, Ether, and XRP – assets with institutional support – fell around 10% to 20%. In contrast, other tokens lost more than 60%, especially those without ETF access or treasury exposure.

Market Sentiment Remains Low Despite Positive News

Despite positive developments like a pro-Bitcoin Fed chair and new regulation, Hougan said sentiment remains deeply negative. “Why is the Crypto Fear and Greed Index near all-time high levels of fear when the new Fed chair is a bitcoin fan?” he asked.

He compared the current cycle to previous crypto winters in 2018 and 2022, saying bearish sentiment during such times usually overwhelms good news. He explained that cycles often end not with sharp rallies but with quiet exhaustion and low activity levels.

Possible Signs of a Turnaround Emerging

Hougan said the current winter is already over a year old, matching the length of past downturns. He suggested the market may be closer to a recovery than most investors realize.

He noted that macro conditions are improving. Growth in the U.S. economy, the passage of the Clarity Act, and early signs of sovereign interest in Bitcoin may support the next market phase. These factors, along with ongoing progress in regulation, stablecoins, and tokenization, show that the ecosystem continues to develop.

Hougan concluded that while timing remains uncertain, current trends match patterns seen near previous market bottoms. He advised clients to consider that the worst may be behind, even if sentiment remains low.