Bitwise: Strong Q4 2025 Fundamentals Hint at Bear-Market Bottom, 2026 Recovery Possible
Bitwise’s Q4 2025 Crypto Market Review finds mixed price action but improving on-chain and revenue fundamentals that resemble a bear-market bottom and could set the stage for a 2026 recovery. Key data: Ethereum and layer-2 transaction activity hit all-time highs while ETH price fell ~29% in Q4; stablecoin market cap topped $300 billion and stablecoin transaction volumes remained robust; crypto equities fell roughly 20% despite crypto-company revenues outpacing many traditional sectors; DeFi adoption rose, with reports of Uniswap processing volume comparable to major exchanges. Bitwise CIO Matt Hougan compares Q4’s divergence—weak prices vs. strong fundamentals—to early 2023 before a multi-year rally. Analysts remain split on 2026 outlook: Fundstrat’s Tom Lee warns of a slow year with political and macro headwinds delaying upside, while VanEck expects a bullish Q1 as U.S. fiscal clarity and Fed stability return. Bitwise lists potential 2026 catalysts: progress on U.S. crypto legislation (CLARITY Act), a stablecoin ‘supercycle’, a new Fed chair, and major broker-dealers offering client access to crypto ETFs. For traders, the report signals a classic bottoming pattern—strong on-chain metrics and revenues amid depressed prices—which may favor risk-on positioning if macro and regulatory catalysts materialize. Primary keywords: Bitwise, Ethereum, stablecoins, crypto fundamentals.
Bullish
The combined reports point to stronger on-chain activity (ETH and layer-2 transactions at ATH), rising stablecoin supply and volume, and accelerating crypto-company revenues despite weak prices. Historically, such divergence—improving fundamentals while prices are depressed—has preceded cyclical recoveries (Bitwise explicitly compares Q4 2025 to early 2023). Potential regulatory and macro catalysts (CLARITY Act progress, stablecoin adoption, Fed leadership clarity, broker access to crypto ETFs) increase the chance of renewed inflows and price recovery. Short-term: prices may remain pressured until clear macro or regulatory signals appear, so expect volatility and possible continued downside if macro risk spikes. Medium-to-long term: if catalysts materialize and on-chain demand remains strong, capital rotation into ETH, layer-2 tokens, and liquid crypto assets (including stablecoin-driven activity) could be bullish for ETH and related tokens. Overall, the news favors a bullish outlook for ETH provided macro and regulatory conditions improve.