Bitwise called the second quarter the toughest stretch crypto has faced since the 2022 bear market, with Bitcoin down 13.40% and every major token bleeding. Its chief investment officer says one piece of legislation — the CLARITY Act — will decide whether Q3 marks the bottom.
Bitwise Chief Investment Officer Matt Hougan on Thursday called the second quarter the toughest stretch crypto has faced since the 2022 bear market, warning that the market is pricing a 2022-level bottom. His firm's crypto market review names one variable above all others for the months ahead.
A nine-month crypto winter
Bitcoin dropped 13.40% in Q2, extending the crypto winter to nine months — the longest run of negative quarterly returns since 2022. The damage spread across the majors: Ethereum leads the losses at 46.89% down year-to-date, followed by Cardano at 56.53%, XRP at 42.90%, and Solana at 40.61%.
Not everything bled. Hyperliquid surged 79.03% in Q2 and 157.96% year-to-date, driven by rising adoption of perpetual futures and US spot ETF launches. AI-linked Bitcoin miners also stood out: the Bitwise Crypto Innovators 30 Index climbed 30.57% in Q2, the second-best performing asset class year-to-date.
The CLARITY Act as the swing factor
Bitwise described the CLARITY Act as the single most important variable for Q3. If it passes, the firm says it would likely mark the bear market's bottom. 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 more catalysts round out the watch list. The GENIUS Act takes effect in January 2027, with regulators finalizing stablecoin rules in Q3 that Bitwise expects to trigger a wave of stablecoin announcements. New Fed Chair Kevin Warsh's first real signal arrives at Q3's FOMC meeting and the late-August Jackson Hole gathering.
What the calendar says next
History offers a mixed backdrop. July has been one of Bitcoin's stronger months, averaging a 10.69% gain, while August and September are the weakest at 0.03% and 4.09% average losses. Meanwhile, public companies now hold 1.28 million BTC worth $76 billion, or 6.11% of total supply — a buyer base that grew even as prices fell.
Source: Benzinga
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