Wintermute Data Reveals Crypto Dry Up Despite Liquidity Surge
Wintermute's latest report highlights a global rise in liquidity due to central banks easing monetary policies, which includes rate cuts by the Federal Reserve and new liquidity programs by the European Central Bank. Despite this increase, crypto markets have failed to attract significant investments, with capital flowing instead into AI-linked stocks and prediction markets. Stablecoins have shown consistent growth, but most major cryptocurrencies like Bitcoin and Ethereum remain stagnant. Bitcoin’s traditional four-year halving cycle appears to no longer drive prices, as macroeconomic factors and liquidity dominate. While the crypto market's structure remains stable with reduced leverage and controlled volatility, Wintermute warns that fresh inflows through ETFs and digital tokens are essential for sustainable recovery.
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Increase in Global Liquidity Due to Central Bank Policies
Wintermute's recent report highlights that international liquidity is increasing rapidly, driven by liberalization policies implemented by global central banks. Since mid-2024, major institutions such as the Federal Reserve, the European Central Bank, and the People's Bank of China have reduced or halted quantitative tightening and interest rate hikes. For instance, the Federal Reserve cut rates three times in 2024, while the ECB introduced new liquidity programs to stabilize markets. As a result, the global M2 money supply has consistently grown since late 2024. However, crypto markets have failed to attract significant inflows, with liquidity instead being channeled into equities, reflecting a growing disparity between traditional financial recovery and crypto asset performance.
Funds Favor Stocks, AI, and Predictive Markets Over Crypto
According to Wintermute's data, incremental capital is being funneled into traditional equities and technological sectors, such as artificial intelligence and predictive model markets. Stock market indices remain close to all-time highs due to optimism surrounding AI-linked stocks and platforms like Polymarket. This diversion of capital has contributed to crypto becoming one of the worst-performing industries of 2025, with investors favoring sectors perceived to have higher immediate returns.
Stablecoins Show Growth, but Crypto Inflows Remain Flat
Wintermute emphasizes that the only growth in the crypto market has come from stablecoins. Assets such as USDT, USDC, and others have seen continuous market capitalization growth through 2024 and 2025. In contrast, cryptocurrencies like Bitcoin and Ethereum have experienced flat inflows. The anticipated success of Bitcoin ETFs, which initially generated optimism after their approval in 2024, has dwindled, with mixed activity noted. Wintermute interprets this as caution among both institutional and retail investors when it comes to crypto investments.
Four-Year Bitcoin Halving Cycle No Longer Relevant
The report also reveals that the four-year Bitcoin halving cycle is no longer the price catalyst it once was. The most recent halving event in April 2024 failed to trigger a significant bull run, marking the first time in Bitcoin's history when post-halving price surges were absent. Analysts attribute this to a shift in capital behavior, where major investors now respond more to macroeconomic liquidity trends than speculative cycles. This represents a structural shift in the market, aligning digital asset movements with broader financial flows rather than traditional speculative patterns.
Market Stability Hinges on Fresh Inflows
Wintermute concludes that, despite challenges, the crypto market's structure remains stable. Leverage levels are lower than in 2022, and volatility is under control. Over-the-counter trading volumes increased by over 200% in 2024, suggesting that institutional players remain active. However, the report warns that a sustainable recovery in the crypto market depends on new inflows from exchange-traded funds and digital asset tokens. Without these fresh investments, crypto markets risk trailing behind other risk asset classes.