RESOLVING THE LEDGER
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According to the firm's latest market report, institutions accounted for roughly 72% of spot trading volume on its over-the-counter (OTC) desk during the first half of 2026, the highest share on record and a sharp increase from about 61% in the second half of last year.
"As crypto works through a bear market, with retail largely absent and preoccupied with equities, the structure underneath is easier to see," the report said. "The asset class is maturing, whatever recent price action suggests."
Rather than chasing short-term price swings, institutional investors tend to operate under defined mandates and risk limits, holding positions over longer periods. The result, the report said, is a market with lower volatility and liquidity concentrated in a smaller group of assets.
Realized volatility has fallen from roughly 70% in earlier market cycles to around 45% in the current one, according to Wintermute's analysis. The report also found institutional investors trade a relatively narrow universe of tokens, while retail investors continue to spread activity across a much larger number of assets.
That concentration could make future altcoin rallies more selective.
"The result is a market where the flow that increasingly sets direction is concentrated in fewer names, traded more selectively," the report said. It added that broad-based rallies, where most alternative cryptocurrencies rise together, are becoming less likely as institutional capital focuses on a handful of assets.
The report also points to growing use of derivatives as another defining trend. Wintermute said notional trading volume in altcoin options on its OTC desk increased about 3.4 times from the second half of 2025 to the first half of 2026, driven largely by investors seeking yield rather than outright price exposure. At the same time, contracts for difference, or CFDs, are being used across a wider range of cryptocurrencies for directional trading, hedging and basket strategies.
Beyond trading, tokenized real-world assets continued to gain momentum, with the value of tokenized assets climbing nearly 50% to $31 billion during the first six months of the year, while average monthly transfer volume more than doubled to $9 billion. The firm said institutions are primarily adopting tokenized Treasuries, money market funds and private credit, while retail investors remain more active in tokenized equities.
While Wintermute expects retail participation to return during the next crypto bull market, it argues institutional influence is unlikely to fade. Instead, it said the market is increasingly taking on the characteristics of its largest participants, with professional investors shaping liquidity, pricing and the types of assets that attract capital.
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