The recovery of Bitcoin and Altcoins is coming soon, says the CIO of Bitwise, first appeared on Coinpedia Fintech News
Despite the recent volatility in digital asset markets, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, says that the broader crypto sector may already be emerging from a bear market phase, with institutional demand and improving fundamentals likely driving the next cycle.
We have already had a bear market
Hougan argued that much of the crypto market has experienced a significant decline previously, even though major assets appeared relatively resilient.
“We had a total bear market last year. We didn’t experience it because Bitcoin, ETH, and XRP did well — they had institutional ETF and corporate flows,” he said.
Assets without institutional support, he noted, have fallen sharply, with some major cryptocurrencies declining by 50%–60%, reminiscent of conditions seen during previous bear cycles, such as 2018 and 2022.
According to Hougan, the market may already be moving into a recovery phase.
“We executed the four-year cycle last year. We are already at the bottom. I think we are starting to rise again.”
Institutional demand shaping the market
Hougan said that the introduction of Bitcoin exchange-traded funds in early 2024 created a structural shift in demand. ETF purchases, corporate accumulation, and other institutional buys have at times exceeded the number of new Bitcoins entering circulation.
“If you look at ETF purchases or corporate buys, it is much more than the amount of new Bitcoins being produced,” he said.
He compared the situation to the gold market, where purchases sustained by central banks initially stabilized prices before eventually driving a stronger recovery once the selling pressure from existing holders eased.
“Just as gold eventually entered a parabolic move, Bitcoin will follow the same path. We are just earlier in this process.”
A more selective altcoin cycle ahead
Hougan said that the next phase of the crypto market is unlikely to resemble the past 'everything goes up' altcoin cycles. Instead, investors are becoming more selective, rewarding projects with real adoption and strong fundamentals.
“We are not going to have a classic altcoin season where every zombie coin rises,” he said. “People will distinguish between high-quality projects and low-quality projects.”
He pointed to networks with strong activity in areas like stablecoins, tokenization, and decentralized infrastructure as potential leaders in the next cycle, while weaker projects could struggle to attract capital.
Long-term outlook remains constructive
Hougan also highlighted a broader shift occurring within the market: early investors and long-term holders are gradually selling portions of their stakes, while institutional investors are increasingly replacing them as the dominant buyers.
This transition, he said, is typical of maturing asset classes and does not necessarily signal weakened demand.
“We are working to overcome this wall of selling… but we will get there,” he said, adding that the long-term trend of increasing institutional participation remains intact.
Although the moment remains uncertain, Hougan said that the combination of structural demand, improving infrastructure, and investor selectivity could support the next phase of growth in digital assets, with stronger projects leading the recovery instead of the entire market moving in unison.
