Empirical Evidence Suggests The Crypto Winter May Last Much Longer

Summary Bitcoin has collapsed 50% from its 2025 highs, but a comparative analysis of the 2013, 2017, and 2021 cycles suggests the true bottom may historically be much lower. While recent regulations like the GENIUS Act and Basel III provide a long-term floor, they lack the explosive upside of previous catalysts. With the Bitcoin Halving over two years away and the Fed pausing rather than cutting, I outline a realistic timeline for the cycle trough. A crypto winter has arrived. From the highs of over $126,000 registered in October 2025, Bitcoin ( BTC-USD ) prices have declined sharply to settle under $70,000. At one point last week, Bitcoin prices were down more than 50% from the highs seen in October. As investors and analysts, it is very important for us to be forward-looking. That said, history often teaches us invaluable lessons. This is why I thought it made sense to compare the current crypto winter to the three crypto winters we have witnessed in the past to evaluate whether we are inching closer to a reversal point based on historical standards. Empirical Evidence Suggests The Crypto Market Rout May Not Be Over Yet There have been 3 crypto winters so far, excluding the current one. The below table summarizes the price action during these 3 crypto winters and their duration. Start End Duration Drawdown November 2013 January 2015 ~400 days ~85% December 2017 December 2018 ~365 days ~84% November 2021 November 2022 ~375 days ~77% Source: Author’s calculations based on public market data In comparison to these 3 crypto winters, the current winter seems young. So far, the crypto winter has resulted in a less than 50% drawdown from the peak prices recorded in October 2025. This is well below the average drawdown of 82% in previous crypto winters. From a purely historical perspective, the current crypto winter seems to have more legs. The current crypto winter has lasted for around 120 days so far. This is also significantly lower than the average duration of previous crypto winters. I am not even remotely suggesting that this crypto winter should last much longer just because empirical evidence points to the probability of such an outcome. However, a look back at the historical performance of BTC gives us a good starting point to evaluate the potential of a trend reversal in the foreseeable future. A Reversal In Bitcoin Prices Seems Distant For Now I believe long-term Bitcoin followers are quite familiar with the reasons that triggered past crypto winters. I am not planning to dive deep into these factors in this analysis. Just to add some context briefly, below are some of the reasons behind past crypto winters. The collapse of the Mt. Gox crypto exchange in 2014. The shutdown of major darknet crypto platforms by the FBI in 2013/14, including Silk Road. Adverse regulatory developments in China in late 2013, when policymakers banned licensed financial services companies from facilitating Bitcoin transactions. The burst of the initial coin offering bubble in 2018 that put pressure on ETH prices. The launch of Bitcoin futures on the CME in December 2017, which enabled investors to short Bitcoin for the first time in a regulated environment. The beginning of the rate-hiking cycle by the Fed in 2022 after a couple of years of 0% interest rates. The collapse of UST in 2022. The collapse of FTX in 2022. These are just some of the most identifiable reasons behind the past crypto winters. Some of these developments triggered a crypto winter, while others added fuel to the market rout in later stages of a crypto winter. In this segment of the analysis, my main goal is not to look at the reasons behind previous crypto winters but to understand the reasons behind the eventual reversal in BTC prices that ended the crypto winter. Let’s start with the first crypto winter that lasted from late 2013 to early 2015. After reaching a trough of around $170 in January 2015, BTC prices climbed to over $430 to end the year on a winning note. This reversal did not happen because of one major catalyst. It was the result of a few positive developments that helped boost the market sentiment toward BTC in general. One of the most important developments was the early interest shown in cryptocurrencies by institutional investors. For instance, in January 2015, Coinbase completed a Series C funding round for $75 million and attracted some notable investors such as the New York Stock Exchange, Andreessen Horowitz, USAA, and even BBVA Ventures (the venture capital arm of BBVA). In a press release at the time, Coinbase highlighted how this marked the first time major financial institutions invested in a Bitcoin company. These investments paved the way for Mr. Market to begin treating BTC as a legit asset, not just a trading instrument invented to satisfy the needs of day traders. Favorable regulations also played a key role in 2015 as investors rewarded BTC amid the improved regulatory clarity. Although some investors hated it at the time, the BitLicense scheme introduced in New York to regulate cryptocurrencies has proven to be a forward-thinking initiative that attracted large-scale investors to consider BTC-related businesses. The Commodity Futures Trading Commission’s classification of Bitcoin as a commodity, however, was probably the biggest regulatory catalyst in 2025, as it gave birth to BTC derivatives. The approval of the Grayscale Bitcoin Trust ( GBTC ) in May 2015 was also a major positive development. Moving on to 2018 (or the end of the crypto winter that started in 2017), the groundwork for the recovery in BTC prices was laid down by Fidelity in October 2018 by announcing the launch of Fidelity Digital Assets to offer BTC custodian services to large-scale institutional investors willing to invest in cryptocurrencies. Commenting on the rationale behind the launch of Fidelity Digital Assets, CEO Abigail Johnson said : Our goal is to make digitally native assets, such as bitcoin, more accessible to investors. We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use. The launch of Libra by Meta Platforms ( META ) in June 2019 added much-needed momentum to the BTC rally that started earlier that year, as this digital currency was not only launched by a well-established tech giant but was also backed by real assets. From a macro perspective, the biggest boost came in January 2019 when Fed Chair Jerome Powell hinted at a pause in rate hikes that had deteriorated investor sentiment toward risk assets in 2018. The reversal of the third crypto winter began in late 2022 and gained momentum in 2023. The collapse of the Silicon Valley Bank in early 2023 triggered a panic-buying frenzy for BTC as investors and traders moved their money to what they thought was an asset class that was not related to fiat currencies. After this initial buying frenzy, BTC prices stabilized but received a major boost in June 2023 when BlackRock ( BLK ) filed for a spot Bitcoin ETF. The Fed’s pivot to a less aggressive stance on rate hikes also helped BTC prices. If we go by historical standards, I believe investors should be wary of jumping in too early in anticipation of a reversal in BTC prices. There are a few reasons behind my thinking. First, as discussed earlier, BTC prices have reacted positively to Fed rate cuts in the past. This time around, a rate cut seems some time away. The Fed has signaled a pause in rate hikes. This is better than rate hikes, of course, but crypto markets need much more than that to reverse a 50% decline in prices. Given that macro indicators do not invite the beginning of QE just yet, we might have to wait until the end of this year for any indication of a rate cut. Second, we are currently in the middle of nowhere when it comes to the Bitcoin halving event, so we cannot expect the next halving event (or the one before) to have any meaningful impact on BTC prices today. The next BTC halving is expected in April 2028. Just over 2 more years to go. Historically, we have seen pre-halving rallies around 6 to 9 months before the halving event. We are not there yet. On the other hand, cycle bottoms have happened around 12-15 months before a halving event. Going by that logic, the trough of this crypto winter should ideally occur in late 2026 or even in Q1 2027. Not good news for BTC investors. Third, a strong regulatory catalyst is missing, unlike the previous recovery phases following a crypto winter. The GENIUS Act of 2025 has essentially set a floor for BTC prices, as it has removed the existential threat that investors feared once. Thanks to the policy changes introduced in the GENIUS Act, U.S. banks can now issue stablecoins legally. In other words, the government has embraced cryptos, eliminating the risk of a potential blanket ban for cryptos, including BTC. What is not so exciting is that BTC can still fall hard to new lows despite these regulatory changes as the market waits for a new bullish catalyst that could materially increase BTC adoption. One regulation that could eventually turn the tide in favor of BTC, probably later this year, is the implementation of the Basel III Crypto Asset Standards. Under new rules, banks now have what we can think of as a rulebook to hold cryptos on their balance sheet. The changes went into effect on January 1. As a result of this rule, we can expect a slow and steady accumulation of crypto assets by the banking sector by the end of this year. Once again, this is not a blockbuster change that will immediately boost crypto prices but one that could help stabilize prices in the long run. Overall, I believe the market is still a few months (or even a few quarters) away from a major catalyst that could reverse BTC prices meaningfully. Takeaway I have not directly invested in BTC or any other cryptocurrency. However, I own shares of companies that give me indirect exposure to BTC and the broad crypto market, so I keep a close eye on BTC. A study on the history of crypto winters suggests BTC prices may fall further before recovering. I am not betting on either outcome, but since I stand to benefit from a rise in BTC prices through my indirect exposure to Bitcoin, I would welcome the emergence of a catalyst that could boost BTC prices higher. Unfortunately, I don’t see that happening in the foreseeable future.