Crypto Portfolio Drawdown Analysis: Bitcoin, ETH, and Stablecoins

By Chanuka Geekiyanage Oct 30, 2026

A crypto portfolio drawdown is the drop from your highest portfolio value to a later low, and it decides whether you hold through a bear market or sell near the bottom. Bitcoin fell about 53% from its October 2025 peak to its 2026 low, and Ether fell about 65% from its August 2025 high to its February 2026 low. Stablecoins held their value in the same period, but they can fail in their own ways. This article compares how Bitcoin, ETH, and the main stablecoins behave in a drawdown, models what different allocations would have cost you, and shows which mix fits which type of investor.

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What the 2025 to 2026 Drawdown Looked Like

Bitcoin set its all-time high near $126,000 on October 6, 2025. One tracker lists a cycle low of $58,589 on July 1, 2026, which is a 52.92% drop from the peak. By mid-October 2026, the price had recovered to roughly $83,700, about 33% below the high.

Data providers disagree slightly on the peak. Bitcoin.com records $124,448 while Bitbo records $126,102, so your drawdown number depends on the source. Always compare figures from one provider against that same provider’s history.

Ether had a worse run. ETH reached its all-time high of $4,946 on August 24, 2025. It then ground down from about $3,000 at the start of 2026 to $1,743 in February. That is roughly 65% below the peak.

Ether is also still further from recovery than Bitcoin. On October 24, 2026, ETH traded at $2,361, about 52.3% below its all-time high. Bitcoin was around 33% below its high at a similar point.

Asset	Peak	2026 low (drawdown)	Late October 2026 status	What drove the loss
Bitcoin	About $126,000 (Oct 6, 2025)	About $58,600 (Jul 1, 2026), roughly -53%	About $83,700 (Oct 12), roughly -33%	Macro shocks, forced selling, weaker risk appetite
Ether	$4,946 (Aug 24, 2025)	$1,743 (Feb 2026), roughly -65%	About $2,361 (Oct 24), roughly -52%	Higher beta to Bitcoin, spot ETF outflows

Treat the shallower Bitcoin drawdown with caution. Glassnode data cited by Cointelegraph shows earlier ETH bear cycles bottomed after declines of around 80% to 90%. Bitcoin’s older cycle bottoms were also deeper, roughly 75% to 85%. Plan around the worst historical numbers, not the best recent one.

Why Stablecoins Do Not Fully Remove Drawdown Risk

Stablecoins are the part of a portfolio that is supposed to hold at $1. DefiLlama showed total supply at $300.36 billion on October 25, 2026, with USDT at $182.5 billion and USDC at $71.8 billion. Two issuers control most of the market, which is a concentration risk in itself.

The record shows two different failure types. In March 2023, Circle revealed that $3.3 billion of its $40 billion in USDC reserves sat at failed Silicon Valley Bank. USDC fell as low as $0.8774 before recovering to $0.9939 by Monday afternoon in Asia. That was a reserve and banking problem.

The second type is a venue problem. On October 10, 2025, Ethena’s USDe flash-crashed to $0.65 on Binance while it stayed at $0.99 on Curve and Uniswap. The event was later attributed to a platform-specific internal oracle issue. Anyone who held USDe elsewhere saw almost no change, but traders on Binance were liquidated at bad prices.

Stablecoin	Supply (Oct 25, 2026)	Documented stress event	Lesson for your drawdown plan
USDT	$182.5B	Lost nearly $1B in market cap over five days in mid-October 2026	Size gives liquidity, not safety. Watch reserve disclosures and regulation.
USDC	$71.8B	Fell to $0.8774 in March 2023 on SVB exposure	Bank concentration in reserves can break a peg even with full backing.
USDe	Not verified for this article	Hit $0.65 on Binance only, Oct 10, 2025	Synthetic dollars carry hedging and venue risk. Check where it is priced.

Use these checks before you park a large share of your portfolio in any stablecoin:

Read the latest reserve attestation and see how much sits in bank deposits versus Treasuries.
Check whether you can redeem directly with the issuer or only sell on a market.
Look at which venue you hold it on, because a venue-specific price can differ from the real peg.
Split the stablecoin sleeve across at least two issuers.
Treat yield-bearing wrappers as a separate risk, since they add smart-contract risk on top of issuer risk.

Image source: defillama.com/stablecoins

Modeling Allocation Drawdowns

Assume a portfolio starts at the peak and each asset falls by its own peak-to-low amount at the same time: Bitcoin by 53%, Ether by 65%, and stablecoins by 0%. The result is a conservative worst case, because Ether’s low came in February and Bitcoin’s in July. It also assumes no stablecoin depeg and no rebalancing.

Profile	BTC / ETH / Stable	Modeled drawdown	Gain needed to recover
Bitcoin only	100 / 0 / 0	-53%	+113%
Bitcoin and ETH heavy	70 / 30 / 0	-57%	+130%
Balanced	50 / 30 / 20	-46%	+85%
Defensive	40 / 20 / 40	-34%	+52%
Capital preservation	20 / 10 / 70	-17%	+21%

Recovery math is the part people underestimate. A 46% loss needs an 85% gain to get back to the old high, and a 57% loss needs 130%. That is why the same bear market feels survivable in one allocation and ruinous in another.

How much any single asset dominates the result matters as much as the split. If one coin is most of your risk, the table above understates your real exposure, so it helps to start with measuring crypto portfolio concentration risk before you pick percentages.

Does Staking ETH Change the Drawdown?

Not much. Staking yield accrues slowly, while a 50% price decline happens in months. Yield does not rescue a portfolio that is down more than half.

Staking adds its own constraints during a crash. You may face a withdrawal queue, a liquid staking token that trades below ETH, or smart-contract risk in the staking protocol. Those matter most when you want to sell, which is exactly when markets are stressed. Decide your staked share before the drop, and see how much of your crypto portfolio you should stake for sizing.

How to Measure Your Own Drawdown

Do this once per quarter, and again after any 20% move:

Record your total portfolio value in one currency at the same time each day.
Track the running peak value, then compute drawdown as current value divided by peak, minus 1.
Record the worst drawdown in each calendar year and the days it took to recover.
Split the result by asset so you see which holding caused most of the loss.
Compare the result with the loss you said you could tolerate, and rebalance if it was larger.

Common Mistakes

Counting stablecoins as cash. They are claims on an issuer and a venue, and both can fail.
Holding stablecoins on the same exchange you trade on. A venue problem can hit your collateral and your trades together.
Using last cycle’s drawdown as the plan. Shallower recent drops do not set a limit on the next one.
Ignoring recovery math. Losses are not symmetrical, so deeper drops require much larger gains.
Rebalancing without a rule. Without set bands, most people buy too early or not at all.

My Take

For most investors, I would hold Bitcoin as the core and keep Ether smaller. Ether lost more in this cycle (roughly 65% versus 53%) and is still about 52% below its high, while Bitcoin is about a third below. Ether has real use cases, but it has been the weaker drawdown asset in both history and this cycle.

I would size the portfolio from the loss I can tolerate, not from a return target. If a 46% drop would make you sell, the balanced profile is too aggressive, and the defensive one is the better fit. Advanced investors with a long horizon and income that does not depend on the portfolio can run Bitcoin- and ETH-heavy, but they should expect a 55% to 60% drawdown at least once.

The stablecoin sleeve should be split across USDC and USDT or another large issuer, and held where I can redeem or withdraw it quickly. Avoid putting that sleeve in yield products I have not read the contracts and audits for. Check reserve disclosures, redemption terms, and which venue prices the token before you deposit.

Conclusion

Bitcoin and ETH both behaved like high-drawdown assets in 2025 and 2026, and Ether behaved worse. Stablecoins reduced the portfolio loss in every model above, but the 2023 USDC and 2025 USDe events show that they carry issuer, bank, and venue risk. Your allocation determines your drawdown far more than your timing does.

The practical next step is to compute your own drawdown, compare it with the profiles in the table, and write down a rebalancing rule before the next decline. Then split your stablecoin holdings across issuers and venues.

FAQs

1. How much can a Bitcoin and ETH portfolio lose in a bear market?

Earlier cycles saw Bitcoin fall roughly 75% to 85% and Ether fall roughly 80% to 90%, while this cycle saw about 53% and 65%. Plan around the deeper historical numbers, because a shallow cycle does not guarantee the next one.

2. Are stablecoins safe during a crypto crash?

They held up well in 2025 and 2026, but USDC dropped to $0.8774 in 2023, and USDe hit $0.65 on Binance in 2025. Spread holdings across issuers and venues, and redeem or withdraw to a wallet you control when stress rises.

3. Should I rebalance during a drawdown?

Rebalancing sells stablecoins to buy Bitcoin and ETH at lower prices, which only works if you can handle further drops. Set a rule in advance, such as acting when an asset moves five percentage points from target.

4. How do I calculate my crypto portfolio drawdown?

Track your portfolio value over time and keep a running peak. Drawdown is the current value divided by the peak, minus 1, and a spreadsheet handles it easily.

5. Does staking ETH reduce my drawdown?

Staking yield offsets only a small part of a large price decline, so it does not change the drawdown much. It also adds withdrawal queues and smart-contract risk, which matter most when markets are falling.

References

CoinCentral (Bitcoin drawdown data as of October 12, 2026): https://coincentral.com/?p=214357

Crypto Briefing (Bitcoin one year after the peak): https://cryptobriefing.com/bitcoin-down-32-percent-year-after-record/

24/7 Wall St. (ETH price and drawdown, October 24, 2026): https://247wallst.com/investing/cryptocurrency/2026/10/24/ethereum-price-prediction-where-could-eth-be-by-the-end-of-october/

24/7 Wall St. (ETH 2026 decline to $1,743): https://247wallst.com/investing/2026/05/30/can-ethereum-still-reach-4950-again/

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About the Author: Chanuka Geekiyanage

Chanuka is a content writer, editor and contributor at Panaprium, specializing in long-form editorial articles. He conducts in-depth research and produces well-structured, carefully edited content with a strong focus on clarity, SEO best practices, and consistent formatting. His work spans lifestyle, fashion, wellness, and technical topics, and all articles are reviewed and refined to meet Panaprium’s editorial standards.

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