2025 Crypto Bear Market “Repricing” Institutional Capital: Analyst
The steep decline in altcoins over the past year may reflect a broader reassessment of which blockchain networks are likely to attract long-term capital, as institutional investors begin a gradual, multiyear entry into the market, analysts say.
Excluding Bitcoin (BTC), 2025 turned out to be a bear market for the wider cryptocurrency market. Decentralized finance (DeFi) tokens fell 67% while cryptocurrencies associated with smart contract blockchains delivered a negative average return of 66%, according to blockchain data shared by Jamie Coutts, the chief crypto analyst at Real Vision.
The past year’s poor performance was a “repricing” of the leading crypto projects as institutional capital was seeking to gain more exposure, Coutts wrote in a Wednesday X post.
“Repricing the highest quality (network adoption, fundamentally sound) protocols/L1s, just as the multi-year onboarding of institutional capital commences,” he said.
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Coutts is the latest analyst to highlight an ongoing repricing in how cryptocurrencies are valued as maturing digital asset investors seek exposure to tokens powering protocols with organic usage and revenue, not just general altcoins.
Looking at the past year, Solana was the leading blockchain by fees, with $585 million generated, while second was Tron with $576 million in revenue, according to crypto intelligence platform Nansen.
Institutional and large investors tend to gravitate to the five leading cryptocurrencies, according to Nicolai Sondergaard, research analyst at Nansen.
“Solana ETFs are still seeing inflows, but the same can’t fully be said onchain. ETH, on the other hand, has seen some players rotate from BTC,” the analyst told Cointelegraph, adding:
“Many expect that with liquidity coming back, big players prepare by accumulating, and this seems to be accurate based on onchain and offchain data.”
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Institutions launch regulated altcoin investment vehicles despite 2025 altcoin bear market
Despite the past year’s poor performance, large financial institutions continue to launch regulated crypto investment products, including US investment bank Morgan Stanley.
Morgan Stanley filed to establish two cryptocurrency exchange-traded funds (ETFs) on Tuesday — one tied to Bitcoin and the other to Solana — followed by news on Wednesday of a third ETF filing also submitted on Tuesday tied to Ether (ETH), signaling a deeper crypto push from Wall Street participants.
However, industry participants have shared mixed predictions about the performance of the cryptocurrency market in 2026.
While the founder of Hong Kong-based investment firm Trend Research, Jack Yi, said he was “bullish” on crypto for the first half of 2026, Fundstrat Global Advisors predicted a local Ether bottom of around $1,800 during the first quarter of the year, Cointelegraph reported.
However, an internal note written by Fundstrat’s co-founder and managing partner, Tom Lee, also predicted a rally into “year-end,” after crypto markets find a “durable low” in the first quarter.
Lee is also the chairman of BitMine Immersion Technologies, the largest corporate Ether holder with $13 billion in total ETH holdings.
Still, the excess leverage of the previous year has been “cleared,” bringing cryptocurrency valuations back to “levels that meet institutional entry thresholds,” amid the growing regulatory clarity, according to Lacie Zhang, a market analyst at Bitget Wallet.
More regulated crypto ETFs and bipartisan progress on crypto legislation suggest that “2026 could mark a turning point from repricing to sustained accumulation anchored more in long-term institutional adoption,” the analyst told Cointelegraph.
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