Crypto prices have continued to slide even as signs of institutional progress remain in place. According to Bitwise Asset Management Chief Investment Officer Matt Hougan, the disconnect comes down to a mix of structural issues, lingering market trauma, and broader pressures that have kept buyers cautious.
In a recent market note, Hougan said the downturn is not simply a response to short-term volatility. Instead, he argued the market is still absorbing the impact of earlier shocks, even as longer-term growth indicators quietly continue to develop.
Fallout From October’s Liquidation Event Still Lingers
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Hougan pointed to the October 10, 2025 liquidation event as a key reason sentiment has struggled to recover. On that day, roughly $19 billion in futures positions were wiped out in a single session, triggering forced selling across the market.
According to Hougan, the scale of that event left a lasting mark on investor confidence. Many participants remain cautious, and sustained buying interest has been slow to return. Large liquidation events tend to leave an impact that doesn’t disappear quickly, even after markets begin to calm.
Regulatory Uncertainty Remains an Issue
Hougan also pointed that regulatory uncertainty is an ongoing issue for crypto, especially in the United States. He referenced stalled movement on the CLARITY Act, legislation intended to outline a clearer framework for digital asset markets.
Without firm rules in place, institutions may hold back on larger allocations. Clear legislation, Hougan argued, plays a major role in determining how quickly traditional financial firms can move capital into digital assets.
Macro Factors Still Weigh on Crypto
Hougan said crypto is still reacting to what’s happening outside the industry. Moves in traditional markets, particularly equities, continue to affect risk appetite, and sharp selloffs in stocks tend to carry over into digital assets as well.
Even when on-chain activity holds up, broader market stress can limit buying interest. In recent years, crypto has tended to move alongside other risk assets when broader markets come under pressure.
Longer-Term Progress Has Not Stopped
Hougan rejected the idea that the downturn signals a collapse in adoption. He said institutional activity has continued, pointing to ongoing demand through spot crypto ETFs as one example.
Beyond ETFs, he noted continued development in areas such as tokenization, stablecoins, and regulated market infrastructure. These trends, while not much visible in day-to-day price action, have continued to move forward.
Bottom Line
Hougan’s assessment is that the current price weakness is being driven by several overlapping factors rather than a single trigger. Lingering market stress, unresolved regulatory questions, and pressure from broader financial markets have all played a role. While sentiment remains cautious, structural development across the sector has continued in the background.
