Bitwise: Bitcoin's 'Floor Is Rising' in Mildest Bear Market on Record Despite 8-Month Downturn

According to Bitwise Senior Investment Strategist Juan Leon, Bitcoin's current bear market represents the mildest structural downturn on record as institutional adoption strengthens, despite an eight-month 50% drawdown. Institutional clients have shifted from asking whether crypto can survive to discussing entry points and position sizing, with existing allocators treating the decline as a buying opportunity while new capital pools await regulatory clarity.

The current downturn contrasts sharply with prior cycles, with Bitcoin down 50% versus 78% during the 2022 bear market and 84% in 2018. Traditional bottoming indicators are emerging, including oversold momentum readings and record spot Bitcoin ETF outflows in June. However, Leon attributed ongoing weakness primarily to macro pressures—sticky inflation supporting higher interest rates and AI enthusiasm siphoning capital flows—rather than fundamental deterioration. Since April, memory-chip ETFs have attracted roughly $12 billion in inflows while spot Bitcoin ETFs experienced over $4 billion in outflows, though Leon expects this dynamic to reverse as AI capex expectations normalize.