Catenaa, Saturday, January 24, 2026-Crypto liquidity in 2025 became increasingly concentrated in bitcoin, ether, and a select group of large-cap tokens, according to a report from market maker Wintermute, signaling a shift away from broader altcoin cycles.
The report found that capital flows no longer spread widely across the market, resulting in shorter and more selective altcoin rallies. Wintermute noted that the median altcoin narrative rally lasted just 19 days last year, down from 61 days in 2024.
The collapse of memecoin cycles early in 2025 contributed to reduced capital formation outside major tokens.
Institutional participants have shifted toward tactical positioning around news events, with more deliberate and recurring execution strategies replacing one-way seasonal trading cycles.
Large counterparties increasingly use structured channels, such as exchange-traded funds and digital asset treasury companies, to deploy capital into major tokens, concentrating liquidity and limiting spillover into smaller assets.
On derivatives, Wintermute observed growing use of contracts for difference and options strategies, with more systematic and yield-generation approaches emerging.
The firm highlighted that liquidity pathways now play a central role in shaping market activity, as execution quality and settlement safety drive institutional behavior.
Looking ahead, Wintermute suggested that crypto’s performance in 2026 will depend on whether liquidity broadens beyond top assets or remains constrained.
Significant price moves among major tokens, wider mandates for corporate buyers, or renewed retail engagement could trigger broader market rotation, though the firm views large-scale retail re-entry as less likely.
