Pantera Capital Says 2025 Was a Hidden Crypto Bear Market, Setting the Stage for 2026

What appeared to be a choppy but survivable year for crypto in 2025 was, beneath the surface, a prolonged and severe bear market for most digital assets, according to venture capital giant Pantera Capital. In its 2026 outlook, Pantera said the downturn for non-bitcoin tokens actually began more than a year earlier, in December 2024, and quietly intensified through the end of 2025.

Pantera estimates that the total crypto market capitalization excluding bitcoin (BTC), ethereum (ETH), and stablecoins fell roughly 44% from its late-2024 peak. This extended decline crushed investor sentiment and leverage, pushing the market into levels historically associated with capitulation, a phase marked by panic-driven selling as investors abandon hopes of a near-term recovery.

While bitcoin closed 2025 down only about 6%, the broader market experienced far deeper losses. Ethereum declined roughly 11%, Solana (SOL) fell around 34%, and the wider universe of tokens excluding BTC, ETH, and SOL dropped close to 60%. Pantera noted that the median token lost approximately 79% of its value, underscoring how narrow the market had become. Only a small subset of assets managed to generate positive returns, making 2025 one of the most uneven years in crypto market history.

According to Pantera, price action during the year was driven less by fundamentals and more by macroeconomic shocks, shifting policy signals, positioning, and market structure. Tariff threats, changes in risk appetite, and regulatory uncertainty led to repeated whipsaws, culminating in a massive liquidation event in October that erased more than $20 billion in notional positions, surpassing losses seen during the Terra/Luna and FTX collapses.

Structural challenges added further pressure, particularly around token value accrual. Pantera highlighted that many governance tokens lack clear legal claims to cash flows or residual value, which helped digital asset equities outperform tokens in 2025. On-chain activity also weakened in the second half of the year, with declines in fees, application revenue, and active addresses, even as stablecoin supply continued to expand.

Despite the pain, Pantera believes the duration of this drawdown now resembles previous crypto bear markets, potentially setting up a more constructive environment in 2026. Rather than predicting prices, the firm sees the coming year as a shift in capital allocation, with bitcoin, stablecoin infrastructure, and equity-linked crypto exposure likely to benefit first if fundamentals stabilize. Pantera expects 2026 to be shaped by institutional adoption, real-world asset tokenization, AI-driven on-chain security, bank-backed stablecoins, consolidation in prediction markets, and a wave of crypto IPOs, rather than a broad speculative token rally.