Bitwise’s view on the final months of 2025 reads like a cautious, hopeful note rather than a loud market call. Momentum in the chains rose even as prices stalled, and that gap is exactly what traders are talking about. Some think this marks a bottom. Others say it’s too early to be sure.
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Crypto: activity increases in the chain
According to Bitwise it is Ethereum Activity and second-tier transactions rose to new highs, and decentralized trading grew significantly. Stablecoin supply also increased, with its total market capitalization crossing the $300 billion mark in the fourth quarter.
Reports note that decentralized exchange volumes sometimes matched or even exceeded those of large centralized platforms. These are hard figures. They are signs that real usage and liquidity are expanding beneath the surface.
The latest Bitwise Crypto Market Review has just been published and it is the most important we have ever published.
Why? Because it shows a tension in the crypto markets that has historically signaled a bear market bottom (see Q1 2023).
Receipts: during the fourth quarter of 2025…
– The price of ETH fell by 29%……
— Bitwise (@BitwiseInvest) January 21, 2026
Why prices lagged behind
Bitwise Chief Investment Officer Matt Hougan compared this setup to early 2023, when prices lagged rising fundamentals before a significant recovery over the next two years.
On paper the comparison is correct. Price can be stubborn. Market psychology often lags behind the reality within the chain, and traders sometimes wait for a clearer macro story before investing capital.
Fundstrat’s Tom Lee offers a counterpoint, saying that could be this year bumpy late into the evening, as tariffs and political tensions dampened risk appetite. This view keeps many investors cautious.
Crypto, Stablecoins and DeFi take center stage
According to market data, flows into stablecoins have accelerated, and fund inflows into cryptocurrency companies outpaced several other sectors in the stock market. DeFi usage was no longer a niche metric; it was central to the fourth quarter story.
“That’s the kind of divergence you see at the bottom of bear markets, when sentiment has fallen but fundamentals have risen,” Hougan said.
Some infrastructure companies reported rising revenues. At the same time, trading volumes remained subdued compared to previously observed peaks, which helps explain the discrepancy between on-chain strength and sideways price action.
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Why this could be important for 2026
Bitwise highlighted ten broad indicators that it considers health signals for the market, ranging from transaction numbers to custody and fee trends. Progress was also made in regulatory clarity.
According to reports, the Clarity Act could change the way stablecoins are treated in the US, and a new chairman of the US Federal Reserve could change policy in ways that matter for risky assets.
Bitwise sees the fourth quarter as a quiet period in which things improved behind the scenes, even if prices did not show this. The company says this type of gap between price and activity has occurred before major rebounds. It doesn’t mean a rally will happen right away, but the market could be preparing for a stronger year ahead.
Featured image from Unsplash, chart from TradingView