Bitwise’s take on the final months of 2025 reads like a careful, hopeful note rather than a loud market call. Momentum on the chains rose even as prices stalled, and that gap is exactly what has traders talking. Some think it marks a bottom. Others say it’s too soon to be sure.
Crypto: On-Chain Activity Surges
According to Bitwise, Ethereum activity and layer-two transactions climbed to new highs, and decentralized trading grew markedly. Stablecoin supplies also swelled, with the total market cap passing the $300 billion mark in Q4.
Reports note that decentralized exchange volumes at times matched or exceeded those of major centralized venues. These are hard numbers. They are signs that real use and liquidity are expanding under the surface.
The latest Bitwise Crypto Market Review just dropped—and it’s the most important one we’ve ever published.
Why? Because it shows a tension in crypto markets that has historically signaled a bear-market bottom (see Q1 2023).
Receipts: During Q4 2025…
– ETH’s price fell 29% ……
— Bitwise (@BitwiseInvest) January 21, 2026
Why Prices Have Lagged
Bitwise’s chief investment officer, Matt Hougan, compared this setup to early 2023 when prices trailed rising fundamentals before a significant rebound took hold over the following two years.
The comparison makes sense on paper. Price can be stubborn. Market psychology often lags behind on-chain realities, and traders sometimes wait for a clearer macro story before committing capital.
Fundstrat’s Tom Lee offers a counterpoint, saying the year could be bumpy until late, with tariffs and political tensions weighing on risk appetite. That view keeps many investors cautious.
According to market data, flows into stablecoins accelerated, and fund inflows to crypto firms outpaced several other sectors in the stock market. DeFi use was no longer a niche metric; it was central to the Q4 narrative.
“That’s the type of divergence you get at the bottom of bear markets, when sentiment is down but fundamentals are up,” Hougan said.
Some infrastructure firms reported rising revenues. At the same time, trading volumes remained muted compared with the peaks seen earlier, which helps explain the mismatch between on-chain strength and sideways price action.
Why This Might Matter For 2026Bitwise highlighted 10 broad indicators it sees as health signs for the market, ranging from transaction counts to custody and fee trends. Progress on regulatory clarity was also flagged.
Reports say the Clarity Act could change how stablecoins are treated in the US, and a new US Federal Reserve chair could shift policy in ways that matter for risk assets.
Bitwise sees Q4 as a quiet period where things were improving behind the scenes, even if prices didn’t show it. The firm says this kind of gap between price and activity has happened before big rebounds. It doesn’t mean a rally will happen right away, but the market could be setting itself up for a stronger year ahead.
Featured image from Unsplash, chart from TradingView
