The 2022 bear market is still the benchmark for the worst crypto cycle.
Back then, Bitcoin ended the cycle down more than 60%, making it one of the steepest drawdowns on record.
This also lined up with Jerome Powell starting his second term as Fed Chair on the 23rd of May, 2022, which added to the usual market uncertainty around Fed leadership changes.
Against that backdrop, it’s understandable that the market compares this cycle to 2022. However, with a new Fed Chair, Kevin Warsh, stepping in during even harsher macro conditions, the uncertainty is arguably worse than in 2022, something the 30-year U.S. Treasury yield reflects clearly.
As the chart shows, the 30-year U.S. Treasury yield closed at 5.14%, its highest level since the run-up to the 2008 Financial Crisis.
Similarly, the 10-year Treasury yield is nearing the Q4 2023 high of 4.9%, highlighting the impact of persistent inflation and making bonds relatively more attractive for investors seeking yield.
Naturally, the odds of a rate hike by January are above 55%, while rate-cut expectations are effectively at 0%.
Taken together, this cycle clearly looks weaker than the 2022 crypto bear market. Notably, a recent Federal Reserve report also points to a key divergence that supports this view.
Investment-heavy crypto adoption reinforces speculation-led market
A recent Federal Reserve report reveals key data indicating growing cryptocurrency participation in the US.
Notably, 10% of Americans used crypto in 2025, the highest level since 2022.
From a technical view, this looks like conviction-led momentum, especially with crypto closing 2025 down 7.85%, marking its first bearish yearly close since 2022. In that context, rising usage could be interpreted as a bullish signal.
However, a closer look changes the picture.
Crypto usage is still mostly investment-driven, not utility-based, with around 9% of respondents using crypto for investing or trading purposes, compared to much smaller shares for payments and remittances. This clearly contradicts the growing “DeFi” narrative in the market.
Backing this, the report shows unbanked users (6%) are more likely to use crypto for transactions.
Put simply, crypto payments are not mainstream.
Instead, among the unbanked, crypto is more relevant where access to traditional banking is limited. To put this into perspective, only 2% use crypto for transactions where banking services are available, choosing crypto for payments by preference.
Hence, the 10% crypto usage among Americans remains largely speculative, with DeFi momentum still weak. This aligns with a macro-sensitive crypto cycle, finishing the year down over 7%, reinforcing the view that this cycle could be shaping up as weaker than 2025, as macro FUD climbs back toward pre-2022 levels.
Final Summary
- Macro conditions are still tighter than in 2022, with high yields and restrictive policy keeping risk appetite weak.
- Crypto usage is mostly investment-driven, not payments or DeFi, showing a still-speculative market cycle.