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What appeared like a uneven 12 months for crypto in 2025 was, beneath the floor, a full-scale bear marketplace for most tokens that started greater than a 12 months earlier, in line with distinguished enterprise capital agency Pantera Capital.
In its 2026 outlook, the VC agency stated that the non-bitcoin token market has been in a sustained downturn since December 2024. Complete crypto market capitalization excluding bitcoin (BTC), ethereum (ETH), and stablecoins dropped about 44% from its late-2024 peak by way of the top of 2025.
The decline compressed sentiment and leverage to ranges traditionally related to capitulation – a stage of a panic-driven sell-off, the place holders abandon hope of a restoration and liquidate positions to forestall additional losses.
Whereas bitcoin completed final 12 months solely modestly decrease, Pantera stated the remainder of the market endured a grinding and largely unresolved drawdown.
The dispersion was excessive.
Bitcoin ended 2025 down roughly 6%, whereas ETH fell about 11% and SOL declined 34%. The broader token universe, excluding BTC, ETH, and SOL, dropped near 60%, with the median token down roughly 79%. Pantera described 2025 as an exceptionally slender market the place solely a small fraction of tokens generated optimistic returns.
Somewhat than fundamentals, Pantera stated macro shocks, positioning, flows, and market construction dominated worth motion. The 12 months featured repeated whipsaws tied to coverage developments, tariff threats, and shifting threat urge for food, earlier than culminating in a significant liquidation cascade in October that worn out greater than $20 billion in notional positions, bigger than throughout the Terra/Luna and FTX collapses.
Structural points compounded the strain. Pantera highlighted unresolved questions on token worth accrual, noting that governance tokens usually lack clear authorized claims to money flows and residual worth out there to fairness holders.
That dynamic helped digital asset equities outperform tokens throughout the 12 months. On-chain fundamentals additionally softened within the second half, with declines in charges, utility income, and lively addresses, whilst stablecoin provide continued to develop.
Pantera stated the period of the drawdown within the wider market now mirrors prior crypto bear markets, establishing a doubtlessly extra favorable backdrop for 2026 if fundamentals stabilize and market breadth returns past BTC.
Somewhat than providing worth targets, Pantera frames 2026 as a capital-allocation shift, with bitcoin, stablecoin infrastructure, and equity-linked crypto publicity positioned to learn first if fundamentals stabilize and threat urge for food returns.
In December, Pantera’s Paul Veradittakit stated the agency expects 2026 to be outlined by institutional adoption, with development concentrated in actual world asset tokenization, AI-driven on-chain safety, bank-backed stablecoins, consolidation in prediction markets, and a surge in crypto IPOs reasonably than a broad return to speculative token rallies.
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