While crypto prices struggled to find direction toward the end of 2025, a growing body of data suggests the market may have already moved past its deepest downturn.
According to a new outlook from Bitwise, the final quarter of the year looked less like the middle of a bear market and more like the quiet phase that often precedes a broader recovery.
Key takeaways
Bitwise argues late 2025 showed characteristics of a market bottom, not ongoing decline
On-chain activity, revenues, and usage rose even as prices struggled
Stablecoins and DeFi adoption reached new highs during the period
Rather than focusing on price performance, the firm’s analysis centers on what investors were actually doing on-chain. The conclusion: activity, usage, and revenues across the crypto ecosystem were accelerating even as sentiment remained weak.
Fundamentals strengthened as sentiment stayed depressed
Matt Hougan, Bitwise’s chief investment officer, argued that this type of disconnect has appeared before at major inflection points. In his view, markets tend to bottom when participants lose interest just as adoption quietly improves.
A similar dynamic unfolded after the FTX collapse, when uncertainty dominated headlines but the structural foundation of the market was already repairing itself. Hougan believes late 2025 fits that historical pattern, with price action lagging behind improving fundamentals.
Usage growth tells a different story than prices
One of the clearest signals highlighted by Bitwise was the surge in blockchain usage. Transaction volumes across Ethereum and its scaling networks climbed to record levels, suggesting growing demand for blockspace regardless of short-term market moves.
At the same time, crypto-native businesses continued to post strong revenue growth. Bitwise noted that several segments of the industry are now expanding faster than many publicly traded companies, challenging the idea that crypto remains purely speculative.
Stablecoins and DeFi quietly expand their role
Stablecoins also played a central role in the late-2025 landscape. Transaction volumes surged, and total market value climbed beyond $300 billion, reinforcing their position as a core payment and settlement layer rather than a temporary trend.
Decentralized finance showed similar momentum. Hougan pointed to platforms like Uniswap, which consistently handled more trading volume than centralized players such as Coinbase. He described this shift as a structural change rather than a short-lived anomaly.
Analysts split on how 2026 unfolds
Despite the improving data, expectations for 2026 remain divided. Tom Lee of Fundstrat believes macro pressures, including tariffs and political uncertainty, could keep markets under pressure for much of the year before momentum returns later on.
Others are more optimistic. VanEck sees the early part of 2026 as more supportive for risk assets, pointing to signs of policy stabilization and increasing regulatory clarity in the United States.
Bitwise also highlighted several possible tailwinds ahead, including progress on crypto legislation, continued expansion of stablecoins, leadership changes at the Federal Reserve, and wider access to crypto ETFs through major wealth management firms.
