Bitwise Chief Investment Officer Matt Hougan said markets have been in a prolonged winter since early 2025, even if the damage was easy to miss.

In a memo to clients, Hougan said bitcoin is down about 39% from its October 2025 all-time high, while ether has fallen roughly 53%, with many other tokens dropping more.

A ‘full-blown’ winter call

Hougan argued investors should treat the current period as a true winter rather than a routine correction.

He compared it to prior downturns in 2018 and 2022, saying bearish sentiment can overwhelm incremental good news.

Hougan wrote:

“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.”

Institutional flows masked the drawdown

Hougan said the cycle effectively began around January 2025, even though bitcoin’s price peak came later.

He argued that strong demand through U.S. spot bitcoin ETFs and digital asset treasury vehicles helped cushion prices, keeping the downturn from looking worse.

During the period, ETFs and treasuries bought more than 744,000 BTC, which he pegged at roughly $75 billion in demand.

Hougan said without that support, bitcoin’s drawdown could have been closer to 60%.

Looking for exhaustion

Hougan said winters often end with exhaustion rather than excitement, and he described the current mood as resembling prior market bottoms.

He pointed to strong economic growth, a surprise on the Clarity Act, and signs of sovereign interest in bitcoin as potential supports, alongside sentiment gauges like Bitbo’s Bitcoin fear and greed chart.

He added:

“It’s always darkest before the dawn.”