Bitwise: The third quarter marked the beginning of 'crypto spring'

According to Matt Hougan, Chief Investment Officer at Bitwise, the third quarter could have been "one of the best periods in cryptocurrency history" due to the sharp recovery in cryptocurrency prices and the growth of network markets. In a quarterly report published on Thursday, Bitwise reported a 46.4% increase in its large-cap cryptocurrency index and an inflow of $6 billion into U.S. spot Bitcoin ETFs, bringing cumulative net flows for the year back into positive territory.

The growth was not limited to prices. The value of tokenized stocks rose by 65.5% to nearly $3.2 billion, and open interest in decentralized perpetual futures reached a new record of about $26 billion, with a growing share attributed to stocks, commodities, the forex market, and pre-IPO shares.

"Page after page – it's all the same: the last part of the chart shoots up. That's exactly what you want to see if you're looking for the start of a crypto spring," Hougan wrote.

Cryptomarket analysts are discussing whether the downturn is over. In September, CryptoQuant reported that technical and network indicators confirm a new Bitcoin bull market, while Bitget's Chief Analyst Ryan Lee told Cointelegraph that more indicators are needed to confirm the end of the cycle. Hougan pointed to ETF flows and network activity as additional signs of a possible recovery.

According to Bitwise, Bitcoin (BTC) rose by 42.3% in the third quarter, Ethereum (ETH) by 69.1%, and Solana (SOL) by 59.2%. All ten components of the Bitwise large-cap cryptocurrency index showed double-digit growth, with Chainlink (LINK) being the best performer, rising by 97.6%.

"Three months ago, cryptocurrencies were at the bottom of despair. Prices, network activity, ETF flows – everything was down," Hougan said.

The recovery did not affect everyone. Shares of Bitcoin miners Riot Platforms and Hut 8 fell by 26.4% and 25.4%, respectively, while Galaxy Digital lost 16.8%. The number of public companies holding Bitcoin decreased by nearly 6% to 173, although their combined assets increased by 0.5%. The number of public companies with Ethereum fell to 35 from 40, but their combined assets grew.

However, from the beginning of the year to September, the Bitwise large-cap cryptocurrency index remained 6.2% lower, despite strong quarterly growth.