Bitcoin slid into a steep downturn in the second quarter of 2026, its deepest decline since the last bear market. Asset manager Bitwise sees the move as a bottoming phase rather than a breakdown.

Bitwise said in a third-quarter 2026 crypto market review that bitcoin fell 13.4 percent in the second quarter and was down 32.9 percent year to date, according to blockchain media outlet Bitcoin Magazine on July 13.

Bitcoin briefly slipped below $60,000 in June, falling under that level for the first time since 2024. It was about 52 percent below its peak of $126,080 set in October last year. Bitwise said the correction has extended the crypto winter to a ninth month and that its Bitwise 10 Large Cap Crypto Index posted negative returns for a third straight quarter.

Bitcoin’s losses were smaller than those of other major tokens. Its 32.9 percent year-to-date decline was less than Ethereum’s 46.9 percent, Solana’s 40.6 percent and Cardano’s 56.5 percent. Bitcoin’s share of the overall crypto market rose to 64.2 percent in a market worth about $1.88 trillion. That meant bitcoin served as a backstop even amid broad selling.

The most notable shift in the second quarter was outflows from exchange-traded products, or ETPs. The category saw $4.9 billion leave during the quarter, its worst quarter since launch in January 2024. Assets under management still stood at $72.4 billion and cumulative net inflows since launch were $53.4 billion, but the episode showed how quickly institutional sentiment can deteriorate.

Even so, demand still outweighed supply. Spot exchange-traded products and listed companies have bought about 1.55 million BTC since the launch of exchange-traded funds, about 3.6 times the 455,416 BTC newly mined over the same period. Prices were weak, but structural buying remained in place, Bitwise said.

Listed companies also increased bitcoin holdings. Corporate bitcoin holdings totalled 1.28 million BTC, up 11.3 percent from the previous quarter, reaching 6.11 percent of the 21 million-coin issuance cap. Companies added 130,467 BTC in the second quarter. The number of companies holding bitcoin fell by 3 to 184.

The most symbolic move came from Strategy. Strategy sold bitcoin for the first time since 2022 to raise funds for dividends toward the end of the quarter. The sale totalled $218 million. It had holdings valued at $52.3 billion and cash of $2.55 billion, but MSTR shares fell 30.3 percent in the second quarter and were down 42.8 percent year to date.

Market rules also continued to shift. The U.S. Commodity Futures Trading Commission approved the first bitcoin perpetual futures on a U.S.-regulated exchange, on prediction-market platform Kalshi. That moves part of the centre of crypto derivatives toward regulated U.S. trading infrastructure. Broker Charles Schwab began spot bitcoin trading for retail clients, and E-Trade expanded access to its 8.6 million users.

Regulatory legislation, however, was delayed. The Clarity Act, a market structure bill, stalled in the Senate over issues related to an ethics provision. Its probability of passage in 2026 fell to about 20 percent from 75 percent in May on prediction markets.

Matt Hougan (맷 호건), Bitwise’s chief investment officer, said the mood in crypto markets was close to the worst he has seen in the industry over the past 8 years, but he focused more on the gap between price and industry fundamentals. "The market is putting bear-market prices on an industry that is twice as large as it was at the last cycle bottom," he said. "The current foundation will determine what grows in the spring," he added.

Bitwise also cited seasonality in the short term. Bitcoin has risen an average of 10.7 percent in July. Bitwise said that since 2014, adding a 5 percent bitcoin allocation to a traditional 60-40 portfolio over rolling three-year periods improved performance in every period.

This quarter’s figures showed weak sentiment and prices, but bitcoin-centric funding dynamics and corporate holding trends remained intact. With spot products, corporate treasury strategies and regulated market infrastructure moving at the same time, the downturn is difficult to view as only a price correction, an analysis said.