Bitcoin Bear Market Bottom Rising as Institutional Investor Base Expands

Bitwise Asset Management's Juan Leon says that Bitcoin's current bear market is structurally different from past cycles. The company notes that the institutional investor base has expanded, raising the floor under prices.

Leon, a senior investment strategist at Bitwise, told The Block in a report published on July 9 that client conversations have changed significantly. 'In 2022, clients asked whether crypto could survive,' he said. 'In 2026, they are asking about entry points and position sizing.' This shift suggests that the current downturn is the mildest structural bear market on record.

Bitcoin has dropped around 50% from its peak, which is less severe than the 78% decline in the 2022 bear market or the 84% drop in 2018. Historically, the bottom of each cycle has risen as the asset matures and marginal holders shift from retail speculators to professional managers.

Leon emphasized that further declines are possible, pointing out that past bear markets lasted around 12-13 months, while the current downturn is in its eighth month. He noted oversold momentum indicators, unrealized losses for about half of Bitcoin holders, and renewed accumulation by long-term holders as signs a bottom may be forming.

The crypto market's weakness primarily reflects macroeconomic headwinds rather than fundamentals, Leon said. Sticky inflation has dampened expectations for interest-rate cuts, while geopolitical tensions have added to uncertainty. The artificial intelligence boom is also pulling in billions of dollars that might otherwise have gone into crypto.