Bitwise's Hougan says Q3 charts point to "cryptocurrency spring"

Bitwise's Matt Hogan points out almost every major indicator that Bitwise's songs have gone up sharply.

Matt Hogan, Bitwise's chief investment officer, says the third quarter may have been "one of the best seasons in crypto history," arguing that the surge in crypto prices and the growth of blockchain markets signal the start of a "crypto spring."

In its quarterly market review published Thursday, Bitwise reported a 46.4 percent gain in its major crypto index, along with $6 billion in US Bitcoin ETF cash flow, bringing year-to-date net flows back into positive territory.

This growth was beyond the price of cryptocurrencies. Tokenized equity rose 65.5% to nearly $3.2 billion, while open interest in perpetual decentralized futures hit a new record of nearly $26 billion, with a growing share of equities, commodities, foreign exchange and pre-IPO stocks.

"Page after page after page, it's all the same: the most recent section of the chart swings sharply upward," Hogan wrote. This is exactly what you want to see if you are looking to start a crypto spring.

Cryptocurrency analysts are debating whether the market slump is finally over. CryptoQuant announced in September that technical and chain indicators confirm a new bull market for Bitcoin, while Bitget Senior Analyst Ryan Lee told Cointelegraph that more indicators are needed to confirm the bottom of the cycle. Hogan pointed to ETF flows and chain activity as additional signs of potential recovery.

Bitcoin (BTC) rose 42.3% during the third quarter, while Ether (ETH) and Solana (SOL) rose 69.1% and 59.2%, respectively, according to Bitwise.

All 10 major crypto components of the company posted double-digit quarterly gains, with Chainlink ( LINK ) the top performer, up 97.6%.

"Three months ago, crypto was in the depths of despair," Hogan said. "Prices, chain activity, ETF flows—everything was down."

Year-to-date performance of assets tracked in the Bitwise 10 Large Cap Crypto Index. Source: Bitwise

However, the comeback did not extend to every corner of the industry.

Shares of bitcoin miners Riot Platforms and Hut 8 fell 26.4 percent and 25.4 percent, respectively, during the third quarter, while Galaxy Digital fell 16.8 percent, according to Bitwise.

The number of SOEs holding bitcoin fell nearly 6% to 173 in the quarter, although their total assets grew 0.5%, while the number of SOEs holding Ether fell from 40 to 35, even as their combined holdings increased.

Meanwhile, Bitwise's large-cap crypto index fell 6.2 percent for the year to September, despite strong quarterly growth.

Looking ahead, Bitwise said it expects the SEC's innovation exemption to draw billions more in tokenized assets to blockchain.

We believe Q4 will move tokenization from experimental to production. We expect this exemption to bring billions of additional tokenized assets into blockchains such as Ethereum, Solana, NEAR and others.”

Meanwhile, it expects the future to be perpetually growing. The market is gaining momentum after trading more than $6 trillion year-to-date in places like Hyperliquid and Lighter, up 42 percent year-over-year.

"With regulatory support expected this quarter, we anticipate the growing Prep market to accelerate as US investors begin to pour in," Bitwise said.