Crypto market liquidity turned uneven in 2025, in response to market maker Wintermute. Investor capital concentrated round a small group of tokens, whereas a lot of the market struggled to achieve traction.
Because the crypto market breaks away from earlier cycle-driven patterns, the agency recognized three key developments it believes may set the stage for a broader market restoration in 2026.
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Crypto Liquidity Turned High-Heavy in 2025
In its 2025 digital asset OTC market overview, Wintermute famous that the yr put lots of the cryptocurrency market’s long-standing assumptions to the take a look at. It additionally revealed a broader shift in how liquidity operates throughout the sector.
Usually, in crypto markets, capital flowed in a cyclical sample, beginning with Bitcoin as the first entry level for liquidity, then rotating into Ethereum as soon as Bitcoin momentum slows.
It will definitely moved into large-cap and later smaller-cap altcoins as danger urge for food elevated. Nonetheless, this didn’t occur in 2025.
The market-making agency discovered that buying and selling exercise in 2025 was closely concentrated in Bitcoin and Ethereum, alongside a small group of large-cap tokens. Because of this, liquidity turned more and more top-heavy, with capital clustering round main belongings reasonably than dispersing throughout the broader market.
“Capital no longer spreads broadly across the market. Instead, liquidity became more concentrated and unevenly distributed, driving greater divergence in returns and activity,” the report learn.
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Altering Liquidity Dynamics in 2025. Supply: Wintermute
In accordance with the report, this shift was pushed by exchange-traded funds (ETFs) and digital asset treasuries (DATs). Till just lately, stablecoins and direct investments had been the first entry factors for capital flowing into the crypto market.
“However, ETFs and DATs structurally changed how liquidity is funneled into the ecosystem,” Wintermute wrote. “As mentioned, their mandates are expanding and starting to allow exposure beyond BTC and ETH, largely into other large-cap tokens; however, this is happening gradually, so any benefit for the altcoin market will take time to materialize.”
The result was a contraction in market breadth and a rising divergence in returns. This urged a extra focused deployment of capital reasonably than broad-based market rotation. The pattern is clear within the efficiency of the altcoin and meme coin sectors.
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The report highlighted that rally durations within the altcoin market have shortened considerably in comparison with earlier years. Between 2022 and 2024, altcoin rallies sometimes endured for 45 to 60 days.
In distinction, 2025 noticed a pointy decline in rally longevity, with median persistence falling to round 20 days. The dip got here regardless of a gradual emergence of latest metas and themes, together with meme coin launchpads, perpetual DEXs, and the x402 narrative.
“These narratives sparked brief bursts of activity but failed to develop into durable, market-wide rallies. This reflects choppy macro conditions, market fatigue after last year’s overshoot, and insufficient altcoin liquidity to carry narratives beyond their initial phase. This led to altcoin rallies feeling like tactical trades rather than high conviction trends,” the report acknowledged.
Wintermute additionally drew consideration to the efficiency of meme cash in 2025. The report discovered that the mixture meme coin market capitalization fell sharply after the primary quarter. Moreover, it was unable to get well key help ranges. Whereas transient spikes in exercise did happen, they did not reverse the broader downtrend.
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The report cited short-lived episodes of volatility, such because the competitors between meme coin launchpads Pump.enjoyable and LetsBonk in July, as examples of localized buying and selling curiosity that didn’t develop right into a sustained market restoration.
Wintermute Outlines Three Situations for a Broader Market Restoration in 2026
Wintermute emphasised {that a} reversal of 2025’s dynamics would doubtless require a minimum of one in every of three developments:
- Broader institutional publicity: Most new crypto liquidity is getting into the market by way of ETFs and digital asset treasuries, but it surely stays largely concentrated. A wider market restoration would require “expansion of their investable universe.”
- Renewed power in main belongings: A powerful rally in Bitcoin or Ethereum may generate a wealth impact. Nonetheless, the extent to which capital is rotated into the broader market stays unsure.
- Return of retail investor consideration: A shift in retail mindshare from equities again to crypto may deliver new inflows. Nonetheless, Wintermute views this because the much less doubtless state of affairs.
In accordance with the report, outcomes in 2026 will hinge on whether or not one in every of these catalysts is robust sufficient to broaden liquidity past massive belongings.
