Cryptocurrencies have been going through a "bear market" since autumn 2025, a period marked by prolonged price declines and reduced investor confidence. Bitcoin, which hit a record high of over $126,000 (about €108,500) in October 2025, lost more than half its value by mid-2026. A bear market is a phase where prices fall significantly after a peak, often leading to the elimination of weaker participants in the market and strengthening of more resilient ones. This period raises questions about the long-term viability of cryptocurrencies and the expectations that had driven earlier enthusiasm. A bear market typically follows a sharp rise in asset prices, after which doubts emerge and some investors begin selling. If the decline continues, more investors follow suit. In the cryptocurrency market, the use of borrowed funds can worsen this trend. When prices drop rapidly, leveraged positions are often liquidated automatically, leading to further selling pressure. A 10% drop from a recent peak is considered a "correction," while a 20% or greater decline is labeled a bear market. These are standard benchmarks used by market professionals, though they are not strict economic rules. The value of an asset is largely influenced by investor expectations, especially in emerging technologies like cryptocurrencies, where future uses are still uncertain. During periods of growth, these expectations attract new investors, increasing capital inflows and reinforcing price trends. However, during downturns, confidence wanes, and capital flows out, leading to price declines. The "crypto-winter" of 2022 serves as a clear example. During that year, the U.S. Federal Reserve raised interest rates significantly, making riskier investments like cryptocurrencies less attractive. Additionally, the collapse of TerraUSD, a stablecoin, and the bankruptcy of FTX, a major crypto exchange, exposed vulnerabilities in the ecosystem. The entire crypto market lost about 60% of its value in 2022, with Bitcoin losing nearly 66%. Despite the downturn, some elements of the crypto ecosystem have persisted. Stablecoins, which are designed to maintain a stable value relative to traditional currencies like the U.S. dollar, have continued to be used for exchanging cryptocurrencies and facilitating lending and borrowing in decentralized finance. Their share of the total crypto market capitalization rose from about 7% to nearly 20% by 2022. While Bitcoin has not become a widely used means of payment, stablecoins have found more practical roles within the crypto space. This illustrates how bear markets act as filters, revealing which participants and uses survive when optimism fades. Bear markets also reshape financial markets. In January 2024, U.S. regulators approved eleven financial products offering direct exposure to Bitcoin, including those from major firms like BlackRock and Fidelity. This allows investors to bet on Bitcoin without holding the cryptocurrency itself. In Europe, the Mica regulation, which took effect in July 2026, is also transforming the landscape. It requires crypto platforms operating in the European Union to obtain authorization, ensuring compliance with governance, transparency, and client protection standards. These developments reflect the evolving regulatory and investment environment in the crypto sector.