There is a bit of confusion about how some fundamental details of the market will look this year.
Bear markets are generally defined as periods in which a market is down at least 20% from a recent high. With this in mind, over the past couple of months, a popular story has emerged claiming that the crypto sector’s bull market ended in January and that most of 2025 has been a long bear market for the entire sector.
The story seems true because crypto wallets are currently suffering. Main assets like Bitcoin (BTC +0.98%), Ethereum (ETH +1.44%), Solana (GROUND +1.47%), XRP (XRP +0.22%), Cardanoand even Dogecoin spent the year falling while the stock market roared higher, led by the “Magnificent Seven” group of stocks. So, is 2025 a bear market for crypto or not, and what should you actually do about it if so?
Image source: Getty Images.
What the 2025 withdrawal actually looks like
Let’s start by looking at crypto as a whole rather than any specific coin.
The global crypto market cap was around $3.8 trillion in mid-January before falling sharply in the spring. It then recovered to a peak of $4.3 trillion in early October, before being devastated by the flash crash earlier this month, and now stands at around $3.2 trillion.
The current level of $3.2 trillion represents a decline of about 16% from the start of the year and about 23% from the October peak. In stock market terms, this effectively places the entire crypto sector between a sharp correction and the start of a bear market.
But at the level of individual parts, the situation seems much worse than this implies.
Take a look at this table:
SPY data by YCharts
As you can see, Bitcoin’s performance has been disappointing for most people. Ethereum is in the doldrums again after briefly showing signs of momentum. And Solana collapsed despite a large influx of tokenized real-world assets (RWA) into its chain.
In contrast, the stock market is up about 16% in 2025, even after the tariff-driven selloff earlier in the year, and even amid considerable economic uncertainty. When you hold coins down double digits while stock index funds are green, it certainly looks like a crypto bear market.
Today’s change
(0.98%) $886.62
Current price
$91560.00
Key Data Points
Market capitalization
$1,827 billion
Daily scope
$90278.00 -$91905.00
52 week range
$74604.47 -$126079.89
Volume
41B
Average flight
0
Gross margin
0.00%
Dividend yield
N / A
The label matters less than your playbook
From there, two scenarios can be considered.
First, the decline so far this year is just a reset within a broader uptrend. In this world, October’s sharp decline and recent $1 trillion disappearance from crypto market value are painful but ultimately temporary, and not the start of a multi-year decline. If this is correct, continuing to accumulate high-quality coins is likely to yield favorable results over a long-term horizon.
In the second scenario, the real bear market is still ahead. Crypto comes from experienced a period of new exchange-traded funds (ETFs) and supportive policy measures for the first time. Without such catalysts, investors could withdraw their capital and redirect it to greener pastures elsewhere. If this scenario proves true, the market will be well on its way to the depths of market conditions that crypto natives jokingly call “goblin city,” and Bitcoin could fall as much as another 50%, and altcoins are expected to fall by 80% or more.
Today’s change
(1.44%) $43.05
Current price
$3039.35
Key Data Points
Market capitalization
$367 billion
Daily scope
$2972.60 -$3050.05
52 week range
$1398.62 -$4946.05
Volume
12B
Average flight
0
Gross margin
0.00%
Dividend yield
N / A
If the current slowdown eases into a mere slump over the next month, that suggests the first scenario is true. The best approach is to continue maintaining dollar cost averaging in Bitcoin, Ethereum, Solana, and XRP as their recovery is likely imminent. It may also be advisable to acquire other altcoins with deep discounts, if your risk tolerance is high enough for that.
But if the liquidation accelerates or proves lasting, the second scenario is more likely. Here, taking risks too quickly with the crypto majors or jumping into altcoin investments is virtually guaranteed to be deadly for your portfolio. The right approach is to become much more selective and cautious in your buying activity, and focus your purchases on proven assets like Bitcoin, which will definitely survive the bear market, no matter how difficult it gets.
Either way, understand that low prices won’t be forever for all cryptoassets, and if you plan to be in the market for at least the next five years, it’s a better idea to buy than to be left out, even if it’s scary to see prices fall. Bear markets often seem like the worst time to look for opportunities, but the truth is that opportunities are always there if you are willing to plan ahead.
