New capital entered crypto in 2025, but it largely remained concentrated in major assets such as Bitcoin and Ether rather than spreading across the broader market. Wintermute’s report finds that exchange-traded funds (ETFs) and digital asset trusts (DATs) became the primary entry points for that capital, which changed how liquidity traveled through the ecosystem.
Concentration of Crypto Liquidity in 2025
Inflows in 2025 clustered around BTC, ETH, and a handful of other large-cap tokens, so fresh money tended to stay in the top of the market instead of rotating into smaller projects. The report emphasizes that ETFs and DATs funneled capital by mandate into those majors, and that structure left little spillover for most altcoins. As a result, the anticipated broad rotation into smaller tokens did not materialize.
Impact on Altcoin Market Performance
Altcoin rallies became shorter and more fleeting in 2025, with average rallies lasting roughly 20 days compared with around 60 days in 2024. Popular narratives—such as memecoin launchpads, perpetual DEXs, and AI-related tokens—still produced quick spikes, but those moves faded fast as liquidity concentrated in major assets. The shorter cycle for altcoins reflected where investor attention and capital actually flowed during the year.
Changes in Derivatives Markets
Derivatives activity shifted noticeably in 2025: options volume surged and more than doubled year over year, and usage tilted away from pure directional bets toward systematic approaches. Traders increasingly used strategies focused on yield generation, downside hedging, and covered calls, which points to more professionalized risk management. That evolution in derivatives complements the concentration of spot liquidity in BTC and ETH.
Retail and Institutional Behavior Shifts
Retail speculative interest moved partly out of crypto and into equities, especially themes tied to AI, robotics, and quantum computing, reducing a previous source of attention for smaller tokens. Flows also varied by region: Asian investors sold during April’s tariff-driven volatility, European positions redistributed over the summer, and U.S. investors led net selling into year-end as the Federal Reserve signaled a more hawkish stance. These regional patterns helped reinforce the overall concentration of liquidity.
For more on how ETF flows impacted Bitcoin specifically, see Bitcoin ETFs in 2025: inflows and liquidity, which dives deeper into ETF-driven dynamics and fund-level flows.
Future Outlook for 2026
Wintermute highlights three potential factors that could change the 2025 pattern in 2026: broader ETF and DAT mandates that would allow funds to allocate beyond the largest tokens, a BTC and ETH rally that could create a wealth effect, or a renewed tilt of retail attention back toward crypto. Any of these would alter where liquidity enters the market and therefore how performance is distributed across assets.
For a closer look at Wintermute’s conditions for a BTC recovery, consult the Wintermute bitcoin outlook for 2026, which outlines the scenarios that could broaden market participation.
Why this matters
If you run mining equipment, these market structure changes affect demand and price drivers even when they don’t change your day-to-day operations directly. When capital concentrates in BTC and ETH, price moves for those assets play a larger role in miners’ revenue and in decisions by buyers and miners looking to convert or hedge proceeds. At the same time, reduced retail attention to smaller tokens means less speculative upside for projects outside the majors, which can influence where newly mined coins find liquidity.
What to do?
Stay focused on the assets you mine and how they are traded: if you mine BTC or ETH, expect liquidity to remain relatively deep, while smaller tokens may see shorter, less reliable demand spikes. Consider basic risk-management steps such as setting sale thresholds and using simple hedges if available; the report notes more use of hedging and yield strategies in derivatives markets. Monitor regional flow drivers and macro cues that affect demand for mined coins, and keep an eye on changes to ETF or DAT mandates that could widen where capital goes next.
For additional context on likely ETF-driven capital flows next year, see crypto ETF prospects for 2026, which discusses fund-level drivers and what broader mandates might mean for market depth.
