Bitcoin Bear Markets Are Getting Softer, But So Is the Bull Market
Spot bitcoin ETFs and professional investors are softening the sell-off, but also cooling the upside spikes. Bitwise and Schwab see a more mature market taking shape.
Key Takeaways
- Bitcoin fell about 55% from its peak in the recent bear cycle, less than earlier drops of 75% to 80%.
- Spot bitcoin ETFs attracted professional investors and, according to market watchers, changed how the market behaves.
- With a larger market cap and more long-term holders, both bear and bull markets could become less extreme.
Bitcoin has long paid for its bull markets with brutal crashes, but that tradeoff seems to be changing. The coin fell about 55% from its October 2025 peak in the most recent bear cycle. That is still a big drop, but for Bitcoin it was relatively mild compared with earlier declines of 75% or more.
Less Severe Drops
In November 2021, Bitcoin was still trading near $69,000 (€60,700), only to fall below $16,000 (€14,100) a year later. Higher interest rates, a string of crypto bankruptcies, and the collapse of FTX hit the market hard at the time. Earlier cycles saw drops of 80% or more.
The upside moves used to be even more extreme too. Bitcoin climbed from less than $4,000 (€3,520) in early 2019 to nearly $69,000 (€60,700) in 2021. After that, the price rose from the 2022 bottom to more than $100,000 (€88,000), helped by the arrival of U.S. spot bitcoin ETFs that made the coin accessible to a much larger group of investors.
ETFs and a Bigger Investor Base
Ryan Rasmussen, director and head of research at Bitwise, sees spot ETFs as a major reason the cycle is changing. Before the ETFs, Bitcoin ownership was mostly concentrated among retail investors, crypto-native funds, and traders with short-term positions. ETFs gave financial advisors and other professional investors a familiar way to add Bitcoin to traditional portfolios.
Those investors often behave differently. A portfolio with a 2% Bitcoin allocation feels a drop very differently than a crypto investor who has 20%, 30%, or more of their money in the coin. Advisors can also buy more after a sharp drop to get back to their target weight, while after a strong rally they may sell some during rebalancing. That can soften sell-offs, but it can also limit room for huge rallies.
Jim Ferraioli, director of digital asset research at Schwab, also points to Bitcoin’s size. The coin is back around a $2 trillion (€1.8 trillion) market cap, which means a lot more capital is needed to double the price again than in the early years. He also sees the market being supported by a broader group of holders who have lived through multiple crashes and are less likely to sell quickly.
What This Says About the Market
For European crypto followers, this matters because Bitcoin is starting to look more like a mature investment asset than a purely speculative coin. That could mean big price swings do not disappear, but they may become less extreme as ETFs, advisors, and long-term holders make up a bigger share of the market. At the same time, it shows that the crypto market is still heavily shaped by who is buying, who is selling, and how that ownership is managed.
Rasmussen says professional investor involvement at Bitwise stayed high during the recent decline, unlike the bear market of 2022, when interest, in his view, dropped sharply. Ferraioli therefore expects Bitcoin to keep growing into a market with milder bear markets and less explosive bull markets.
