Bitwise Sees a Bear Market Bottom in Q4 2025
According to analysis from Bitwise, the crypto market likely formed a bear market bottom in the fourth quarter of 2025.
While prices across major assets remained weak during this period, Bitwise argues that underlying fundamentals improved sharply. The firm compares the current setup to early 2023, when the market appeared stagnant following the FTX collapse, only to later transition into a strong growth phase.
Weak Prices, Strong Fundamentals
Bitwise highlights a growing disconnect between price action and on-chain fundamentals. Despite prolonged consolidation, several core indicators point to increasing real-world usage and revenue generation across the crypto ecosystem.
This divergence, where sentiment remains pessimistic while fundamentals strengthen, has historically marked late-stage bear market conditions.
On-Chain Activity Reaches New Highs
One of the strongest signals cited is network activity.
Transaction volumes on Ethereum and major Layer 2 networks have reached new all-time highs. This suggests that user demand continues to grow, even in the absence of speculative price momentum.
Sustained increases in transaction activity typically indicate organic adoption rather than short-term trading interest.
Crypto Company Revenues Continue to Grow
Bitwise also points to rising revenues across crypto-native companies.
According to the firm, crypto sector revenues are now outperforming many traditional equity market sectors. This reflects increasing monetization of blockchain infrastructure, trading platforms, and financial applications.
Growing revenues during a weak price environment often signal long-term resilience rather than cyclical speculation.
Stablecoins Hit a Historic Milestone
Stablecoins represent another major pillar of Bitwise’s thesis.
The total market capitalization of stablecoins has surpassed $300 billion for the first time in history. This milestone underscores rising demand for blockchain-based dollars as settlement layers, payment rails, and liquidity instruments.
Stablecoin growth has increasingly become a leading indicator for future crypto market expansion.
DeFi Volumes Continue to Expand
Decentralized finance is also showing renewed strength.
Bitwise notes that decentralized exchanges, particularly Uniswap, are consistently processing higher transaction volumes than centralized platforms like Coinbase.
This shift highlights a gradual migration toward on-chain trading infrastructure and self-custodial financial systems.
Potential Growth Catalysts in 2026
Looking ahead, Bitwise identifies several potential catalysts that could support a broader market expansion in 2026.
Regulatory progress remains a key factor, particularly around the proposed CLARITY Act, which could provide long-awaited legal structure for the crypto market.
Stablecoins may enter a full-scale growth cycle as adoption accelerates across payments, remittances, and institutional settlement.
Leadership changes at the Federal Reserve could also influence liquidity conditions and risk appetite.
Additionally, wider access to crypto ETFs through major brokerage platforms could unlock a new wave of retail and institutional inflows.
Why This Setup Looks Familiar
Bitwise draws a clear parallel to early 2023, when market sentiment was deeply negative despite improving fundamentals.
At that time, the crypto market was widely considered inactive or “dead,” yet many of the same indicators were quietly strengthening beneath the surface. The subsequent recovery reshaped market expectations.
Final Thoughts
If Bitwise’s assessment is correct, Q4 2025 may be remembered as a turning point rather than a continuation of weakness.
When fundamentals strengthen during periods of low confidence, markets often transition from accumulation to expansion. While short-term volatility remains possible, the structural signals highlighted by Bitwise suggest the crypto market may already be laying the groundwork for its next major cycle.
BTCUSA Comment
Markets rarely bottom when optimism is high. The combination of record on-chain activity, rising revenues, stablecoin expansion, and growing DeFi dominance resembles classic late-bear-market conditions. If history rhymes, Q4 2025 may not feel like a bottom in real time — but it could look obvious in hindsight once the next cycle unfolds.
