Bitwise chief investment officer Matt Hougan says Q3 may have been “one of the best quarters in crypto’s history,” arguing a sharp rebound in crypto prices and growing onchain markets point to the start of “crypto spring.”
In its quarterly market review published Thursday, Bitwise reported a 46.4% quarterly gain in its large-cap crypto index, along with $6 billion in US spot Bitcoin ETF inflows that brought year-to-date net flows back into positive territory.
The growth extended beyond the price of cryptocurrencies. The value of tokenized equities rose 65.5% to nearly $3.2 billion, while open interest on decentralized perpetual futures hit a new record near $26 billion, with a growing share tied to stocks, commodities, foreign exchange and pre-IPO shares.
“Page after page after page, it’s all the same: The most recent part of the chart is turning sharply upwards,” Hougan wrote. “That’s exactly what you want to see if you’re looking for the start of a crypto spring.”
Crypto analysts have been debating whether the market slump is finally over. CryptoQuant said in September that technical and onchain indicators confirmed a new Bitcoin bull market, while Bitget chief analyst Ryan Lee told Cointelegraph that more indicators were needed to confirm a cycle bottom. Hougan pointed to ETF flows and onchain activity as additional signs of a potential recovery.
10 large-cap crypto gain double digits
Bitcoin (BTC) gained 42.3% during Q3, while Ether (ETH) and Solana (SOL) rose 69.1% and 59.2%, respectively, according to Bitwise.
All 10 constituents of the firm’s large-cap crypto index posted double-digit quarterly gains, with Chainlink (LINK) the highest performer, climbing 97.6%.
“Three months ago, crypto was in the depths of despair,” said Hougan. “Prices, onchain activity, ETF flows—everything was down.”
Year-to-date performance of the assets tracked in the Bitwise 10 Large Cap Crypto Index. Source: Bitwise
However, the rebound did not extend to every corner of the industry.
Shares of Bitcoin miners Riot Platforms and Hut 8 fell 26.4% and 25.4%, respectively, during Q3, while Galaxy Digital dropped 16.8%, according to Bitwise.
The number of public companies holding Bitcoin fell almost 6% to 173 in the quarter, though their combined holdings grew 0.5%, while the number of public companies holding Ether fell to 35 from 40, even as their combined holdings increased.
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Meanwhile, Bitwise’s large-cap crypto index remained down 6.2% for the year through September despite its strong quarterly gain.
Upcoming catalysts
Looking ahead, Bitwise said it expects the SEC’s innovation exemption to draw billions more of tokenized assets into blockchains.
“We believe Q4 moves tokenization from pilots to production. We expect the exemption will pull billions more of tokenized assets onto blockchains like Ethereum, Solana, NEAR, and others.”
Meanwhile, it expects the growing perpetual futures market to accelerate after more than $6 trillion was traded year-to-date across venues such as Hyperliquid and Lighter, up 42% from the same period a year earlier.
“With regulatory support expected this quarter, we project the growing perp market to accelerate as US investors start to arrive,” said Bitwise.
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