Crypto liquidity stopped spreading across the market in 2025 and instead clustered around bitcoin and ether, according to a new over-the-counter trading report from Wintermute.
Wintermute said the market structure shifted away from broad-based altcoin participation towards a smaller group of large-cap tokens.
The firm noted that capital flows in 2025 broke from previous cycle playbooks that relied on wide liquidity dispersion.
Capital no longer spreads broadly across the market.
Wintermute said in its 2025 digital asset OTC report.
The report added that liquidity has become more concentrated and unevenly distributed across fewer assets.
Wintermute said performance is now increasingly determined by where capital enters the market and how it is deployed.
Exchange-traded funds and digital asset treasury companies were identified as major drivers of liquidity concentration.
The firm said these vehicles have increasingly funnelled capital into major tokens, limiting activity elsewhere.
Wintermute reported that median altcoin narrative rallies shortened significantly during the year.
The median altcoin rally lasted around 19 days in 2025, down from approximately 61 days in 2024.
The report said the memecoin cycle collapsed early in the year, reducing capital formation outside top assets.
Wintermute noted that this collapse limited the durability of rallies beyond the largest tokens.
Altcoin activity became more selective, with short bursts tied to specific themes rather than sustained trends.
These themes included memecoin launchpads, perpetual decentralised exchanges, and emerging payment primitives.
Wintermute said these rallies showed limited follow-through compared with previous cycles.
The report highlighted a shift in institutional execution behaviour during 2025.
Institutional participants showed less directional conviction and more tactical positioning around headlines.
Execution strategies became more deliberate and recurring, reflecting higher market sophistication.
Wintermute said this marked a move away from seasonal trading patterns such as “Uptober”.
On derivatives markets, the firm said off-exchange trading structures expanded during the year.
Contracts for difference gained popularity as a capital-efficient way to access multiple underlyings.
Options trading matured into a core portfolio tool for institutions.
Wintermute said systematic options strategies and yield generation replaced one-way directional bets.
The report stressed that liquidity pathways now matter as much as overall risk sentiment.
Capital increasingly flowed through structured channels such as ETFs and treasury companies.
This flow shaped where market depth accumulated and where large trades remained viable.
Wintermute said this dynamic supported major assets while limiting spillover into smaller tokens.
The firm added that the result was a more range-bound environment for most of the crypto market.
A separate analysis from Finery Markets echoed the growing role of off-exchange execution.
Finery Markets said institutions are prioritising execution quality and settlement safety.
Looking ahead, Wintermute said 2025 may mark the start of crypto’s move away from narrative-driven cycles.
The firm said future performance depends on whether liquidity broadens beyond large-cap assets.
Wintermute argued that a reversal would require corporate buyers to widen their asset mandates.
Strong performance from major assets could also trigger capital rotation across the market.
The firm added that a major return of retail demand could drive new stablecoin issuance.
Wintermute said this retail-led scenario appears less likely under current conditions.