Bitwise Chief Investment Officer Matt Hougan on Thursday called the second quarter the toughest stretch crypto has faced since the 2022 bear market and warned that the market is pricing a 2022-level bottom.
The Numbers From Q2 Were Brutal Across The Board
Bitcoin (CRYPTO: BTC) dropped 13.40% in Q2, extending the crypto winter to nine months, the longest consecutive streak of negative quarterly returns since 2022.
Among major assets, Ethereum (CRYPTO: ETH) leads the damage at 46.89% down year-to-date, followed by Cardano (CRYPTO: ADA) at 56.53%, XRP (CRYPTO: XRP) at 42.90%, and Solana (CRYPTO: SOL) at 40.61%.
The one exception was Hyperliquid, which surged 79.03% in Q2 alone and 157.96% year-to-date, driven by rising adoption of perpetual futures and strong US spot ETF launches.
While tokens bled, AI-linked Bitcoin miners posted some of the best returns of any asset class this year.
Hut 8 (NASDAQ:HUT) gained 151.30% year-to-date, Riot Platforms (NASDAQ:RIOT) added 116.10%, TeraWulf (NASDAQ:WULF) gained 114.97%, and Core Scientific (NASDAQ:CORZ) rose 75.76%.
The Bitwise Crypto Innovators 30 Index climbed 30.57% in Q2, making it the second-best performing asset class year-to-date.
On the losing side, Strategy Inc. (NASDAQ:MSTR) fell 42.79% year-to-date and Coinbase (NASDAQ:COIN) dropped 35.35%.
The CLARITY Act Is Q3’s Make-Or-Break Moment
In its crypto market review, Bitwise described the CLARITY Act as the single most important variable for Q3. If it passes, it would likely mark the bear market’s bottom, according to Bitwise.
If it fails, expect initial volatility followed by a clearing of uncertainty. Prediction markets currently give it only 40% odds of passing in 2026, down from 75% in mid-May, after the bill stalled over ethics provisions tied to the president’s family’s crypto interests.
Three other Q3 catalysts round out Bitwise’s watch list.
The GENIUS Act takes effect in January 2027 with regulators finalizing stablecoin rules in Q3, which Bitwise expects to trigger a wave of stablecoin announcements.
The new Fed Chair Kevin Warsh’s first real signal comes at Q3’s FOMC meeting and the late-August Jackson Hole gathering.
DeFi also quietly outperformed in Q2, with Bitwise’s DeFi index falling only 4% while Bitcoin dropped 22%, attributed to improving token economics and rising revenues across protocols like Aave (CRYPTO: AAVE), which generated roughly $900 million over the past year.
Institutions And Public Companies Bought 3.6x More Bitcoin Than Was Mined
Since spot ETFs launched in January 2024, U.S. spot ETFs and public companies purchased 1,546,195 BTC combined against only 455,416 BTC newly mined over the same period.
Public companies now hold 1.28 million BTC worth $76 billion, representing 6.11% of total supply.
Historically, July has been one of Bitcoin’s stronger months, averaging a 10.69% gain. August and September are the weakest months at 0.03% and 4.09% average losses respectively, with Q4 historically the strongest window of the year.
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