Things aren’t looking too hot in the crypto world right now, and Coinbase says we might already be in another “crypto winter.”
This is a term the crypto space uses when the crypto market drops for a long time, prices stay low, and there’s not much excitement or trading going on.
In a report dropped on Tuesday, Coinbase pointed out a bunch of signs showing the market is dropping fast.
The report says the total crypto market cap, excluding Bitcoin, has dropped to $950 billion. That’s a 41% fall from December 2024, when it was around $1.6 trillion. It’s also lower than it was a year ago, and even below the prices we saw back in late 2021 and early 2022, when the market was already shaky.
Coinbase wrote, “The 200DMA model on bitcoin does suggest that the token’s recent steep decline qualifies this as a bear market cycle starting in late March.”
Venture capital is also feeling the chill. Investments in crypto startups went up a little earlier this year, but they’re still 50% to 60% lower than the crazy levels we saw in 2021 and 2022. Coinbase said, “The absence of fresh capital has slowed innovation across key verticals.”
Bitcoin has dropped below its 200-day moving average, a level often viewed as a warning sign. The COIN50 index, which tracks the top 50 coins other than Bitcoin, has also slipped below its long-term average.
According to Coinbase, “The asset class as a whole has been unequivocally trading in bear market territory since the end of February.”
Altcoins have taken a bigger hit, with many falling sharply due to weak trading volume and a lack of new investment. “The sustained drawdown in altcoins highlights the weakening appetite for riskier crypto investments,” the report explained.
At the same time, problems like high interest rates, rising tariffs, and global economic stress are making things worse. David Duong, who leads institutional research at Coinbase, said markets are kind of “paralysed” right now because both crypto and regular finance are under pressure.
Retail traders aren’t buying much, and even big investors are mostly watching from the sidelines. Coinbase isn’t calling a comeback just yet, but they do think things could start to turn around later in 2025 if inflation drops or interest rates ease up. As the exchange put it, “Once the mood resets, it might do so fast.”
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