Bitwise CIO Matt Hougan Cites Q3 Surge as Sign of 'Crypto Spring'

The third quarter may rank among the strongest periods in the history of digital assets, according to a new report from asset manager Bitwise. Matt Hougan, the firm's chief investment officer, pointed to a broad-based recovery in valuations and onchain activity as evidence that the market may be entering a new "crypto spring."

In its quarterly market review, Bitwise reported that its large-cap crypto index climbed 46.4% over the three-month period. The rebound follows a prolonged slump that had left sentiment depressed just months prior. Hougan noted that nearly every fundamental metric tracked by the firm shifted sharply upward.

Major cryptocurrencies posted substantial double-digit returns during the quarter. Bitcoin gained 42.3%, while Ether and Solana rose 69.1% and 59.2%, respectively. All ten constituents of the Bitwise large-cap index recorded positive quarterly results, led by Chainlink with a 97.6% increase. US spot Bitcoin ETFs also saw $6 billion in inflows, helping push year-to-date net flows back into positive territory.

Beyond Price Action

Growth extended well past spot prices into broader decentralized finance and tokenization sectors. The value of tokenized equities expanded by 65.5% to reach nearly $3.2 billion. Meanwhile, open interest on decentralized perpetual futures—derivatives that allow traders to speculate on asset prices without an expiration date—touched a record near $26 billion.

Despite the broader enthusiasm, parts of the digital asset ecosystem lagged behind. Shares of publicly traded Bitcoin miners Riot Platforms and Hut 8 declined by 26.4% and 25.4% respectively during the quarter, while Galaxy Digital dropped 16.8%. The number of public companies holding Bitcoin fell slightly to 173, though their cumulative holdings increased marginally.

Why it matters

The findings underscore a shifting landscape where institutional engagement and infrastructure growth are beginning to match speculative interest. The influx of capital into spot ETFs and the expansion of tokenized real-world assets point to deeper integration between traditional finance and blockchain networks. While market analysts remain divided on whether a definitive cycle bottom has been reached, the convergence of rising onchain activity and regulatory developments suggests a maturing market structure.

What to watch

Bitwise expects momentum to continue into the fourth quarter, driven in part by regulatory shifts and the SEC's innovation exemption. The firm projects that these regulatory adjustments will encourage more institutional participation and draw billions of additional tokenized assets onto blockchains like Ethereum, Solana, and NEAR. Observers will also monitor whether decentralized perpetual futures maintain their volume growth as US investors gain further access.