Is funding stifling the rally of competing coins? The era of institutions banding together for Bitcoin has arrived

According to the latest “2025 Digital Asset OTC Report” released by market maker Wintermute, the cryptocurrency market is undergoing a fundamental transformation. The era of “Bitcoin eating meat and altcoins drinking soup,” once a symbol of mutual prosperity, has come to an end. It has been replaced by a new landscape characterized by highly concentrated institutional capital and liquidity being precisely locked into top-tier assets.

This report, based on extensive over-the-counter (OTC) trading data, reveals a shocking reality for retail investors: capital is no longer widely dispersed across the entire market as it once was. Instead, it is firmly held in top assets like Bitcoin and Ethereum, leaving little room for altcoins to rise and eliminating their profit opportunities.

Altcoin Bull Runs Suppressed: From 61 Days Down to 19 Days

The most direct data comes from Wintermute’s statistics: in 2025, the average duration of altcoin upward trends has sharply decreased to 19 days. In comparison, in 2024, this figure was 61 days—within just one year, the window for altcoin profits has been shortened by nearly 70%.

The familiar scenario of “altcoins skyrocketing” for retail investors is disappearing. While themes like meme coin launches, perpetual DEXs, and emerging payment protocols still occasionally trigger short-term surges, Wintermute points out that these moves tend to “come quickly and go just as fast,” lacking subsequent capital support, and ultimately fading away like a fleeting bloom.

Market observers generally believe that the rapid collapse of meme coin cycles at the beginning of the year has further intensified this trend. As capital outside of mainstream coins becomes compressed, retail investors’ chances of achieving “doubling dreams” through altcoins have dramatically increased in difficulty.

The Hidden Drivers of Liquidity Suppression: Precise Locking of Institutional Capital

Why does this “the strong get stronger, the weak get weaker” situation occur? Wintermute’s analysis points to a key shift: the channels through which market capital flows have changed.

In the past, retail and institutional funds were mixed, and various altcoins had opportunities for investment. Now, market momentum is primarily driven by ETFs and digital asset reserve companies (such as Strategy, BitMine, and others that include cryptocurrencies on their balance sheets). These institutionalized capital channels are highly selective—they lock vast liquidity precisely into top-tier assets, making it difficult for funds to spill over into altcoins.

In other words, the structural change in institutional capital effectively suppresses the possibility of altcoins gaining liquidity support.

This observation is corroborated by data analysis firm Finery Markets. The firm finds that institutional investors now prioritize execution quality and settlement security, preferring to “flow” capital within regulated, structured channels rather than “surf” in riskier altcoin markets. In short, safety and efficiency have become more important than risk-taking.

Transformation of Institutional Investment Strategies: Saying Goodbye to Seasonal Bets

In addition to shifts in capital flow, the operational strategies of institutional investors have also undergone significant changes.

Wintermute’s analysis states that institutions are now reducing unilateral directional bets and instead focusing more on tactical positioning aligned with news events. This reflects a maturing trading mentality among institutional traders—they are gradually moving away from seasonal myths like “Uptober” (October rally) toward more rational, evidence-based strategies.

Trade execution has also become more cautious and systematic. Institutions no longer rely on “feelings” or hot spots to make decisions but base their investment allocations on data and systematic methods.

In derivatives markets, this shift is even more evident. Contracts for difference (CFDs), due to their high capital efficiency, are favored, and options are gradually evolving from speculative tools into core investment and yield management instruments. The overall market trend is toward more systematic strategies and income-generating methods rather than simple “one-way bets” on price movements.

Outlook for 2026: Two Paths to Break the “Capital Suppression” Deadlock

Looking ahead to this year, Wintermute believes that 2025 marks the end of the wild era where narratives alone could propel the market. Whether the market can improve in the future depends entirely on whether liquidity can break the current deadlock caused by institutional suppression.

To reverse the current situation, Wintermute proposes two possible scenarios, each with its own risks and opportunities:

Scenario 1: Institutional Expansion of Investment Scope (Higher Probability)

Institutional buyers investing through ETFs and holding coins must be willing to expand their investment targets beyond Bitcoin and Ethereum. Only then can capital rotate, and new liquidity support can be provided to altcoins. This requires regulatory improvements and increased risk appetite among institutions.

Scenario 2: Retail Investors Return in Force (Lower Probability)

Another possibility is a new wave of retail investors bringing fresh capital and stimulating large-scale stablecoin issuance. However, Wintermute admits that the likelihood of this happening is relatively low—after all, the market has gradually become more professional and institutionalized.

As a result, the pattern of altcoins being suppressed by capital is unlikely to change in the short term. In an era dominated by institutional capital, whether retail investors can find a breakthrough remains the biggest uncertainty for the crypto market in 2026.