"Over-the-counter" data reveals: The era of competing coins is over, institutional funds are holding tightly to BTC and ETH

According to the latest market analysis by market maker Wintermute, the cryptocurrency market is undergoing a fundamental structural shift. By tracking over-the-counter (OTC) data, this institution has identified a new reality clearly marked by statistical figures: capital is experiencing a large-scale centralization transfer. The former market cycle of “Bitcoin eating meat, competing coins drinking soup” is a thing of the past, replaced by a new pattern where liquidity is highly concentrated in a few leading assets.

The Dissolution of the Drip Effect—How OTC Data Is Reshaping the Market Landscape

In the past, the market followed a relatively stable pattern: when Bitcoin and Ethereum rose, capital gradually spread throughout the entire altcoin ecosystem, forming what is known as the “drip effect.” Wintermute’s analysis of its extensive OTC data reveals that this logic has completely failed.

Liquidity is no longer widely dispersed across thousands of competing coins but is precisely concentrated in Bitcoin, Ethereum, and a few other large-cap assets. This is not a natural evolution of market preferences but a structural change in the capital inflow channels themselves. This shift in OTC data actually reflects a profound transformation in the composition of market participants— the dominance of institutional funds is reshaping the logic of capital flow.

Altcoin Uptrend Cycles Plummet—From 61 Days to 19 Days

Data best illustrates the issue. Wintermute’s report discloses a disappointing reality for many retail investors: the average duration of altcoin bullish runs in 2025 is only 19 days, a significant reduction from 61 days in 2024. In other words, the profit window for altcoins has shrunk from about two months to less than three weeks.

The trigger behind this shift was the rapid collapse of meme coin cycles at the beginning of the year. As this wave of speculation receded, the capital formation space in the market was further squeezed, making it difficult for assets outside the mainstream coins to sustain prolonged upward trends. Although the market still occasionally sees short-term bursts around specific themes, such as DEX, emerging payment protocols, or API infrastructure-related concept coins, these rallies are often fleeting and lack subsequent capital support.

Institutional Funds Changing Course—A New Era of Liquidity Oligarchs

What truly reshapes the market landscape is the structural change in institutional funding channels. The main driving forces in the market have shifted from retail dominance to institutional dominance, including spot ETFs and companies that incorporate cryptocurrencies into their balance sheets (such as Strategy, BitMine, etc.).

These institutionalized capital channels are highly selective. Compared to retail’s broad trial-and-error approach, institutional investors are more cautious, precisely locking in top assets through OTC channels, concentrating large liquidity in regulated and relatively low-risk targets, which makes it difficult for funds to spill over into the altcoin market.

Another institution, Finery Markets, further validates this trend. They observe that institutional investors now place greater emphasis on execution quality and settlement safety, preferring to allocate funds through regulated structured channels rather than “surfing” in higher-risk, illiquid altcoin markets.

Evolution of Large Investors’ Strategies—From “Seasonal Bets” to “Event-Driven”

Meanwhile, the operational logic of institutions is also evolving. Wintermute notes that large investors are reducing straightforward directional bets and adopting more targeted tactical positioning— in other words, they are beginning to adjust their positions based on news events and market catalysts rather than blindly following seasonal trading cycles like “rising in October.”

Trade execution has become more cautious and repetitive, reflecting increasing maturity in trading strategies and a gradual departure from traditional cyclical thinking. In derivatives markets, Contracts for Difference (CFDs) are favored for their high capital efficiency; options are evolving from pure speculative tools to core instruments for portfolio management and yield strategies. The entire market is moving toward a more systematic and structured approach.

Breaking the Cycle in 2026: Pathways to Defy the “Strong Always Strong” Curse

Looking ahead, Wintermute indicates that 2025 marks the end of the era where cryptocurrencies could “fly on narratives.” The key issue is whether liquidity can break the current deadlock.

There are only two possible solutions to break the “strong always strong, weak always weak” phenomenon, but their likelihood varies greatly:

First Scenario: Expansion of Institutional Investment Scope — If institutions, through ETFs and corporate buyers, are willing to broaden their targets beyond Bitcoin and Ethereum, capital rotation could occur. However, this requires institutions to change their risk assessment models, which is quite challenging.

Second Scenario: Retail Investors Return in Large Numbers — A new wave of retail investors could bring fresh capital and stimulate large-scale stablecoin issuance. However, Wintermute admits that, based on current market signals, the probability of this happening is relatively slim.

In any case, OTC data has already revealed the arrival of a new era: the era of “chicken and dog ascending to heaven” for altcoins has ended, replaced by a more fragmented, institutionalized, and highly liquid market order.