The crypto market recorded its third straight quarter of negative returns in Q2 2026, marking its longest losing streak since 2022, according to a market review published by Bitwise.
Summary
- Crypto recorded its longest quarterly losing streak since 2022 after the Bitwise index fell 15.4%.
- Spot Bitcoin ETFs faced record quarterly outflows as digital assets moved closer to traditional stock markets.
- Stablecoin settlements, tokenized assets and prediction markets grew despite weaker prices across major crypto assets.
The Bitwise 10 Large Cap Crypto Index fell 15.4% during the quarter. Eight of its 10 assets ended the period in the red. Spot Bitcoin exchange-traded funds also recorded their worst quarter of outflows since their launch.
Crypto prices extend quarterly decline
Bitwise reported that onchain activity, trading volume and assets held in decentralized finance protocols declined during Q2. Meanwhile, crypto’s correlation with stocks increased, linking digital asset prices more closely with traditional risk markets.
The company said Q2 was “a tough quarter for crypto.” The latest decline extended the market’s run of negative returns to three consecutive quarters, the longest such period since the 2022 bear market.
Spot Bitcoin ETF outflows added to the selling pressure during the quarter. The funds have become an important source of institutional demand since their U.S. launch, but the record quarterly withdrawals showed that investors reduced their exposure as market conditions weakened.
However, ETF flows have changed direction several times during the current market cycle. Bitcoin ETFs attracted more than $3.4 billion across seven consecutive weeks of inflows by May 2026.
Stablecoins and tokenized assets continue growing
Despite lower crypto prices, Bitwise said stablecoin settlement volume reached 2.3 times the volume processed by Visa. The company added that stablecoin issuers now hold more U.S. Treasury securities than most countries.
As reported by crypto.news, adjusted stablecoin transaction volume reached $10.9 trillion in 2025, while total settlement volume reached $33 trillion under broader measurements.
Visa has also expanded its direct involvement with blockchain payments. Visa’s stablecoin settlement run rate reached about $7 billion as of March 2026.
Meanwhile, tokenized real-world assets rose 50.3% during the first half of 2026 to $32.89 billion, according to Bitwise. The sector includes blockchain-based versions of assets such as government bonds, private credit and investment funds.
The figure follows continued institutional interest in tokenization. As crypto.news previously reported, the tokenized real-world asset market approached $34 billion as Treasury products and Ethereum-based assets led the sector’s growth.
Prediction markets and crypto stocks resist downturn
Prediction market trading volume reached a record $43.2 billion in Q2. That total was almost 18 times higher than the volume recorded during the same period one year earlier.
Crypto-related stocks also performed better than major digital assets. The Bitwise Crypto Innovators 30 Index rose 30.6% during the quarter, even as the firm’s large-cap crypto index recorded a double-digit loss.
In addition, Bitwise said Hyperliquid, PancakeSwap and Aave each generated about $900 million in revenue during the previous year. The data points to continued demand for decentralized trading, lending and derivatives platforms.
Hyperliquid processed more than $41 billion in seven-day perpetual futures volume by May 2026. Its open interest also reached approximately $9.4 billion.
Onchain data remains above the 2022 bottom
Bitwise compared current market data with conditions at the bottom of the 2022 crypto downturn. Ethereum transaction activity has increased by about 13 times since then, while DeFi total value locked has risen by more than 60%.
Stablecoin assets under management have also roughly doubled from the 2022 market low. Bitwise said, “It’s only prices that haven’t kept pace.”
The company said the crypto industry is now about twice the size it was at the previous cycle’s bottom. However, Bitwise also warned that stronger network activity and wider institutional participation may not prevent further short-term price weakness.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
