Bitwise's quarterly report highlighted similarities between the current crypto market cycle and 2023, suggesting that the strength of cryptocurrency fundamentals could drive a sustainable recovery for the remainder of the year.
The beginning of 2026 has been marked by a cautious tone in the digital finance sector. This climate of prudence has led many analysts to review previous trends to anticipate potential market movements in the coming months.
Against this backdrop, Bitwise published its January quarterly report, offering a comparative analysis of the current situation and one of the most challenging, yet also most constructive, periods the cryptocurrency industry has experienced in recent years. According to their analysis, the market may be overly pessimistically assessing the sector's true strength, a phenomenon reminiscent of the scenario following the collapse of FTX, which was once one of the industry's leading platforms.
Get ahead of the rally and buy Bitcoin todaySigns of a new accumulation phase in the crypto market
The report prepared by the investment firm establishes a clear parallel between the market conditions observed at the beginning of 2026 and those that prevailed during the first months of 2023. At that time, the sector was trying to shake off the dust after the fall of FTX, an event that depressed prices and investor sentiment to historic levels.
According to the data compiled in the document, that stage of extreme pessimism, where Bitcoin was trading around $16.000, was paradoxically the starting point for a sustained climb that culminated with the cryptocurrency reaching $98.000 in early 2025.
Source: CoinGecko
Matt Hougan, chief investment officer at Bitwise, has been the leading voice behind this analysis, which aims to calm short-term trader anxiety. His interpretation of the current situation is not based on unfounded hopes, but rather on observing a palpable disconnect between the market value of assets and their actual utility or technological adoption.
Hougan highlighted that this divergence is the central axis around which market prospects for the current year revolve, raising the possibility that the recent price correction in cryptocurrencies is simply a pause before financial valuation realigns with the structural growth of the market.
Buy before Bitcoin reaches $150kBeyond the red in the price charts
During the fourth quarter of 2025, the performance of the crypto market offered a lesson on the disconnect between price and fundamentals, which Hougan detailed in the report. During the last three months of the previous year, the prices of major digital assets showed a downward trend or frustrating sideways movement for many market participants. However, while price charts were turning red, internal industry indicators told a very different and much more optimistic story about the health of the ecosystem as a whole.
The ecosystem's fundamentals were significantly strengthened amidst the market correction. Indicators such as the growth of supply chain activity, infrastructure expansion and the steady pace of technology adoption They advanced without losing momentum. These factors demonstrate that the sector's development continued, even when prices showed signs of temporary weakness. The Bitwise report points out that this divergence between market value and actual progress represents a typical inefficiency, where price fails to capture the underlying structural advancements.
According to Hougan, this disconnect stems from the market's bias toward external and short-term factors. During the end of last year, investor sentiment was tempered by macroeconomic caution and fatigue following previous rallies. This narrow perspective led many to overlook signs of genuine growth in crypto technology and infrastructure.
The asset management expert recalls that a similar pattern was observed in 2023, when widespread pessimism obscured opportunities that later proved valuable once the industry's fundamentals demonstrated their strength.
The maturity of the crypto market: signs of a new growth phase
Bitwise's report highlights that investor psychology remains a decisive factor in the repetition of certain market patterns. Comparing January 2026 with the first months of 2023 allows us to observe not only price trends but also changes in collective behavior in the face of uncertainty. Three years ago, the prevailing perception was that the crypto industry was experiencing a definitive crisis, driven by the collapse of several centralized players. However, those who prioritized analyzing adoption and technological development over media hype managed to position themselves better during the subsequent market recovery.
The document suggests that the current market is in a similar consolidation phase, where prices have retreated or stagnated, purging the excess speculation that may have accumulated during the market's bull run, which took Bitcoin to an all-time high of $126.000. This market cleansing is typically a healthy prerequisite for the next leg of sustainable growth, according to the expert. The key difference is that, unlike in 2023, the current environment is not marked by a systemic collapse of a centralized entity like FTX, but rather by natural market fatigue, which contrasts with a much more robust and mature infrastructure.
The data presented by Bitwise encourages readers to consider that market prospects should not be based solely on price action over the past few weeks. Recent history demonstrates that when fundamentals diverge positively from price over an extended period, the resulting tension tends to resolve itself with an upward price movement to catch up with the fundamentals, not the other way around. The recent report emphasizes that this recovery will not happen overnight, but the groundwork for it has already been laid thanks to the work done during the last quarter of 2025.
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Bitwise's scenario for the remainder of 2026 is one of a convergence between financial valuation and the technological reality of the crypto market. If Matt Hougan's thesis is correct, the current year could be characterized by a new phase of expansion, provided macroeconomic conditions remain stable and institutional investment continues to grow.
Hougan and other experts project that Bitcoin could end the year with prices exceeding $150.000 and even approaching $200.000 in scenarios of strong demand. Ethereum is also poised to reach new highs, driven by the increase in stablecoin circulation, the advancement of asset tokenization, and the strength of its technological infrastructure.
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