Bitwise Says Crypto Market Faces Longest Downturn Since 2022

The crypto market is now struggling to maintain momentum. Amid the current crypto market crash, Bitwise published its market review, unveiling the factors affecting the prolonged bearish period.

Bitwise noted that the industry is facing its longest period of quarterly losses since 2022. While the current decline marks the third consecutive quarterly loss, the asset manager believes that several factors, including the Bitcoin ETF outflows and changing investor sentiment, have contributed to it.

However, the analyst added that the industry continues to grow despite these losses. Areas such as real-world asset (RWA) tokenization, stablecoins, and prediction markets saw steady growth.

Crypto market posts third straight quarterly loss

Recently, Bitwise released its ’s longest stretch of quarterly losses since the 2022 crash. Bitwise analysts believe that these losses were driven by negative flows in Bitcoin ETFs, changing investor sentiment, and slowing retail participation. 

Industry growth continues, major areas expand

However, Bitwise also highlighted the crypto industry’s impressive growth despite the falling prices. The analyst shed light on major areas like RWA tokenization, stablecoins, and prediction markets, which have posted significant gains despite the overall negative trend.

For instance, prediction market trading volume hit a record high of $43.2 billion during the quarter. The RWA tokenization space has also seen a remarkable rally of 50.3%, reaching $32.89 billion. At the same time, stablecoins have also grown by more than 2.3 times the transaction volume of traditional payment solutions like Visa.

It is also worth noting that crypto-related companies have outperformed the broader market. Despite the broader bearish sentiment, the Bitwise Crypto Innovators 30 Index surged by 30.6%. DeFi protocols like Hyperliquid, PancakeSwap, and Aave delivered about $900 million in annual revenue. These examples highlight the rapid growth of the industry while the crypto market continues to stay red. The asset manager added,

“The market is quoting bear-market prices on an industry twice the size it was at the last cycle’s bottom—with deeper liquidity, stronger fundamentals, and Wall Street finally onchain. That foundation won’t stop the winter, but it determines what grows in the spring.”

Moreover, the crypto market’s fundamentals remain strong compared to the previous bearish period in 2022. This is further evidenced by the 13x surge in the Ethereum transaction activity and 60% growth in DeFi’s total value locked (TVL).

Source:: Bitwise Says Crypto Market Faces Longest Downturn Since 2022