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The cryptocurrency market likely bottomed in Q4, Bitwise has suggested.
Bitwise investment chief Matt Hougan in a quarterly market report released on Jan. 21 said Q4 showed the type of divergence typically seen at the bottom of a bear market: sentiment was down, but fundamentals were up.
Hougan cited Ethereum’s 29% decline in the quarter while network activity jumped 24.5%. Similarly, he said cryptocurrency equities fell 20% despite projections that the industry is set to grow three times faster than any other sector.
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Hougan said this type of divergence was last seen in Q1 2023 as the market started to rebound from the FTX collapse. What followed was an over two-year rally, he said. During that period, Bitcoin surged from an opening price of about $16,000 in Q1 2023 to a peak of over $126,000 last October.
Current catalysts for a similar run include progress on cryptocurrency market structure legislation, a potential stablecoin supercycle, the appointment of a dovish Federal Reserve chair and exchange-traded fund flows from wirehouses, Hougan said.
The Senate Banking Committee recently postponed a planned markup of cryptocurrency market structure legislation following opposition from cryptocurrency industry participants. However, the Senate Agriculture Committee markup is scheduled for Tuesday.
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Bitwise said stablecoins are decoupling from the broader cryptocurrency market and playing an increasingly important role in cross-border transactions and payments. The company cited volumes in 2025 that surpassed $32 trillion. It said stablecoins would surpass that volume this year, driven by fintech adoption.
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Bitwise’s recent report aligns with its December prediction that Bitcoin and other major cryptocurrencies, such as Ethereum and Solana, would hit new price records this year.
Despite Bitwise’s positive outlook, the cryptocurrency market has had a mixed start to the year. Following an initial rally, the markets are again showing signs of weakness amid macroeconomic uncertainty.
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This article The Crypto Market Likely Bottomed In Q4 2025. Here's Why According To Bitwise originally appeared on Benzinga.com
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