It’s hot outside in New York City, but there’s a crypto winter in the markets – and it’s likely to get worse before it gets better, industry players tell On The Money.
To be sure, we’ve seen this before: 2018, 2020, then in 2022, when a confluence of factors including the FTX scandal that landed Sam Bankman-Fried in jail sent digital currencies down more than 70%.
We’re suffering through a similar slump now, with about 54% of the total crypto market value being eliminated since prices hit their peak in October 2025, when the most popular coin, Bitcoin, hit its high of $126,000. It’s currently hovering around $60,000.
Does that mean the investment world is finally ready to concede that crypto is a house of cards? I doubt it, and that’s based on the caliber of the players involved and the emerging technology the coins support, known as the blockchain. BlackRock, the world’s largest asset manager, is deep into the crypto space with its popular ETFs, and there is no bigger “trad fi” guy than the company’s longtime CEO, Larry Fink.
Still, there’s a good argument to be made that there’s more downside pain ahead. During last year’s run up, speculators using “leverage” or borrowed funds poured into digital coins. Leverage makes any sell off more acute, of course, because traders need to pay back their loans, and that has led to the selling pressure that remains in effect today.
Stablecoins – cryptos backed by assets like US treasuries – are replacing old-fashioned (and more volatile) digital assets for many investors looking to diversify into the digital asset space. China continues its crackdown on its citizens placing money into digital assets like Bitcoin. Holders on the Mainland, and I am told, had accounted for an estimated 20% of ownership so that accounts for a chunk of the selling pressure.
The latest fear, of course, is that the AI boom is stealing crypto’s thunder. With the blockbuster IPO of SpaceX and the market debuts of Anthropic and OpenAI expected to be worth trillions, cryptocurrencies are no longer the new, bright, shiny things on the market.
I’m sure I’m leaving out a few other pressure points but you get the picture: It’s cold out there in crypto land, something close to a blizzard that ain’t fun if you’re a holder. But that’s only if you’re taking a short-term view. I’m not a crypto bro, far from it, yet I’ve seen this market bounce back too many times, and there’s good reason to think it will again.
There is a real infrastructure for this market in place, real liquidity i.e. people buying and selling, real players doing the trading and an underlying technology, the blockchain that is being designed to make transactions of all sorts seamless and less costly once its widely adopted. “What’s notable this time around is that major institutions are sticking around through the volatility, continuing to build infrastructure,” said Eleanor Terrett, the co-founder of the “Crypto In America” podcast and newsletter.
Adam Winnick, the founding partner of the Finality Capital, says the selloff obscures how the business is maturing and actually growing.
“Major fintechs are shipping stablecoin products,” he tells me. “This week, a consortium of 140-plus firms — Visa, Stripe, Mastercard, BlackRock, Coinbase — announced Open USD, a partner-owned stablecoin taking direct aim at Tether and Circle. Institutions are tokenizing real financial products. JPMorgan launched its second tokenized money-market fund, JLTXX, on Ethereum — explicitly designed as compliant reserve collateral for stablecoin issuers.”
Plus he adds AI, through something called “agentic internet is arriving on blockchain rails. More than half of internet traffic is now non-human.”
I can’t (and won’t) tell you to start hoarding Bitcoin for lots of reasons, including the fact that the worst of this selloff probably isn’t over. But if you look at a chart you can see how each allegedly existential crypto winter is followed by a springtime revival. In 2020, Bitcoin prices hit a low of just under $5,000. If you bought on that dip and held, even with the current selloff, you’re up around 1,100% compared to a 200% gain in the S&P.
“Bitcoin volatility scares away the uneducated and the uninitiated,” said Anthony Pompliano, the financial guru known for his early advocacy of the asset. “But it provides extraordinary opportunities for those who understand the timeless principle of buying great assets and holding them for long periods of time.”
I’m pretty sure the next ‘long period of time’ won’t last forever. Let’s just hope it’s not too long.
