The Depths of Crypto Winter

The bad news: We have been in a crypto winter since January 2025. The good news: Chances are, we’re closer to the end than the beginning.

I want to say something obvious because I think it will help you profitably navigate the months ahead: We are in a full-blown crypto winter.

I don’t see a lot of people talking about this online or in the mainstream media, but it’s unequivocally true. Bitcoin is down 39% from its all-time high in October 2025, Ethereum is down 53%, and many other crypto assets are down worse.

It’s important to call this what it is. This is not a “bull market correction” or “a dip.” It is a full-bore, 2022-like, Leonardo-DiCaprio-in-The-Revenant-style crypto winter—set into motion by factors ranging from excess leverage to widespread profit-taking by OGs.

For me, recognizing and accepting this has been incredibly clarifying. 

Why are crypto prices falling despite the rush of good news about adoption, regulation, and other areas of progress? Because we are in the depths of crypto winter. Why is the Crypto Fear and Greed Index near all-time high levels of fear when the new Fed chair is a bitcoin fan? Because we are in a crypto winter.

Those of you who followed crypto during past winters—either 2018 or 2022—will remember that good news doesn’t matter in the depths of winter. We’re not going to rally because Wall Street is hiring aggressively or Morgan Stanley is ramping up on crypto. That will matter in the long term, but not now. Crypto winters don’t end in excitement; they end in exhaustion.

So, when will the end come?

Here’s the good news: I think we’re close.

The History of Crypto Winters

Crypto winters typically last about 13 months. For instance, bitcoin peaked in December 2017 and bottomed in December 2018. It peaked again in October 2021 and bottomed in November 2022.

By that measure, we’re in for a rough stretch. After all, bitcoin peaked in October 2025. Should we go away until next November?

I don’t think so.

The more time I’ve spent analyzing the current “winter” the more I’ve realized it started back in January 2025. We just couldn’t see it because flows from ETFs and Digital Asset Treasuries (DATs) obscured the picture.

ETF and DAT Flows Papered Over the 2025 Winter

Look closely at this chart of the Bitwise 10 Large Cap Crypto Index constituents since January 1, 2025.

Bitwise 10 Large Cap Crypto Index Constituent Returns: 2025 to Today

Source: Bitwise Asset Management. Data from January 1, 2025 to January 26, 2026. Performance information is provided for informational purposes only. Past performance is no guarantee of future returns.

It breaks down cleanly into three groups. Group 1 assets (BTC, ETH, XRP) did okay, falling 10.3% to 19.9%. Group 2 assets (SOL, LTC, LINK) endured a standard bear market, falling 36.9% to 46.2%. But Group 3 assets (ADA, AVAX, SUI, DOT) got slaughtered, falling 61.9% to 74.7%.

The thing that separates the three groups is basically whether or not institutions had the ability to invest in them. Group 1 assets benefitted from massive ETF/DAT support throughout the year; Group 2 assets got ETFs approved during 2025.¹ Group 3 assets never got them.

The scale of the institutional support is significant. For instance, ETFs and DATs bought 744,417 bitcoin during the period shown on this chart, worth somewhere around $75 billion. Imagine where bitcoin would have been without this $75 billion of support. My guess is down ~60%.

Retail crypto has been in a brutal winter since January 2025. Institutions just papered over that truth for certain assets for a while.

It’s Always Darkest Before the Dawn

The thing to remember right now is that there really is a lot of good news in crypto. Regulatory progress is real. Institutional adoption is real. Stablecoins and tokenization are real. Wall Street’s embrace is real.

Good news gets ignored in bear markets, but it doesn’t go away. It gets stored as potential energy. And when the clouds clear and sentiment normalizes, that stored-up energy can return with a vengeance. What could cause the clouds to dissipate? Strong economic growth that sparks an aggressive risk-on rally, a positive surprise on the Clarity Act, signs of sovereign adoption for bitcoin, or just the passage of time.

As a veteran of multiple crypto winters, I can tell you that the end of those crypto winters feel a lot like now: despair, desperation, and malaise. But there is nothing about the current market pullback that’s changed anything fundamental about crypto.

I think we’re going to come roaring back sooner rather than later. Heck, it’s been winter since January 2025. Spring is surely coming soon.

Note:

(1) XRP is an outlier here. It did not have an ETF at the start of 2025, and yet performed well. The reason, however, is obvious: XRP entered 2025 facing an existential lawsuit from the SEC. That lawsuit was dropped early in 2025, and the asset rallied aggressively.

Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

Trading in crypto assets comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks and risk of losing principal or all of your investment. In addition, crypto asset markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.

Crypto asset trading requires knowledge of crypto asset markets. In attempting to profit through crypto asset trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial crypto asset trading. Crypto asset trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price.

The opinions expressed represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events, or a guarantee of future results, and are subject to further discussion, completion and amendment. The information herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice, or investment recommendations. You should consult your accounting, legal, tax or other advisors about the matters discussed herein.