Wintermute: Crypto Liquidity Remains Concentrated in Bitcoin and Ether

Crypto market liquidity remained heavily concentrated in bitcoin and ether throughout 2025, diverging from patterns seen in earlier market cycles, according to a recent digital asset OTC report from market maker Wintermute.

The firm said capital no longer flows broadly across the crypto market, with liquidity increasingly pooling around large-cap assets. Wintermute attributed this shift largely to institutional channels such as exchange-traded funds and digital asset treasury programs, which tend to direct capital toward the most liquid tokens rather than smaller assets.

As a result, market depth has continued to build at the top, while much of the broader token universe has struggled to sustain momentum. Instead of broad risk-on phases, performance has become more fragmented, with returns driven by asset-specific inflows rather than cyclical rotation.

Wintermute found that rallies in altcoins were shorter and less durable in 2025. The median narrative-driven altcoin rally lasted about 19 days, down from roughly 61 days in 2024. Memecoin activity, which previously attracted liquidity, faded early in the year and failed to regain traction.

Institutional trading behavior also shifted. The report noted reduced directional conviction among large counterparties, with a greater focus on tactical positioning around events rather than multi-month themes. Seasonal patterns that once characterized crypto cycles were less evident.

Off-exchange activity expanded as well. Wintermute observed increased use of contracts for difference and options, allowing institutions to gain exposure more efficiently while managing risk.

Looking ahead, Wintermute said future market dynamics will depend on whether liquidity broadens beyond a narrow group of large-cap assets. Without wider capital rotation or renewed retail participation, the firm warned that crypto markets may continue to favor selective, tactical trading over broad-based rallies.