Coinbase Research has warned that a combination of technical breakdowns, declining investor sentiment and macroeconomic pressure could signal the onset of a new crypto winter, potentially mirroring the harsh downturn that gripped digital assets between late 2021 and early 2023. In a note published Tuesday, David Duong, head of institutional research at Coinbase, said several key indicators are flashing red.
That valuation is lower than levels seen during most of the August 2021 to April 2022 period. At the same time, venture capital investment, while slightly improved from late 2024, remains 50 to 60 percent below the highs seen during the 2021-2022 bull cycle.
The broader crypto market is already showing signs of strain. Excluding Bitcoin, the total crypto market cap has fallen to $950b, down 41% from a peak of $1.6 trillion in Dec. 2024.
Duong said this has made the investment environment “paralysed,” with traditional and digital assets alike under pressure.
According to Coinbase, these declines are being compounded by macroeconomic headwinds. Global tariff escalation and prolonged fiscal tightening have curbed investor appetite for risk, freezing capital flows into altcoins and early-stage blockchain projects.
“We think this warrants taking a defensive stance on risk for the time being,” Duong wrote, adding that the market may find its floor between mid-to-late Q2 of 2025, potentially setting the stage for a recovery in the second half of the year.
The current market, though less chaotic, shows similar signs of liquidity stress and investor fatigue.
While the report did not use the term “crypto winter” lightly, the signals mirror conditions seen during the last major market contraction, which followed the collapse of several large crypto firms and wiped out nearly $2 trillion in value over 18 months.