Wintermute Data Reveals Crypto Dry Up Despite Liquidity Surge

The recent report issued by Wintermute affirms that international liquidity is increasing rapidly due to the liberalization policies in the world central banks. Since the middle of 2024, the Federal Reserve, the European central bank, and the people bank of china have decreased or stopped quantitative tightening or rate. Last year the Federal Reserve reduced rates thrice and ECB had introduced fresh liquidity programs to stabilize market conditions. International M2 money supply has grown continuously since late 2024. Nonetheless, crypto markets have not been able to attract any significant inflows. The liquidity has instead been distributed on equities, an indication of a growing disparity between financial recovery and the performance of digital assets.

Funds Flow into Stocks, AI, and Prediction Markets

According to Wintermute data, incremental capital is leaning towards traditional and technological markets. The stock market indices remain close to all-time highs on the hope in the artificial intelligence and predictive model sectors. The new capital formed with the liquidity expansion has been mostly captured by AI-linked stocks and prediction websites such as Polymarket. According to Wintermute, this distraction has made crypto one of the worst-performing industries of 2025.

Crypto Market Does Not Grow with Stablecoin Development.

Wintermute emphasizes the idea that the stablecoins are the only growth in the crypto. The overall market capitalization of the USDT, USDC, and other assets has grown steady up to 2024 and 2025. In the meantime, the inflows of such major cryptocurrencies like Bitcoin and Ethereum are flat. Bitcoin ETFs, the success that caused the upsurge of optimism following its approval in 2024, currently document a blend of activity. Wintermute sees this trend as an indicator of institutional and retail investors being hesitant.

Four-Year Cycle Theory Becomes Obliterated

The report by Wintermute states that the four-year Bitcoin halving cycle is no longer the price mover as it used to be before. In their place, liquidity and macroeconomic dynamics are in the lead. The latest halving in April 2024 did not trigger any significant bull run, becoming the first time in the history of Bitcoin when the post-halving action was not loud. Analysts blame this on a change in capital behavior. The reaction of big investors to macro liquidity requests has become more sensitive to Bitcoin-related milestones. This structural shift indicates an evolving market environment, in which digital assets are transferred according to the overall financial flows, but not speculative cycles.

Market Health Stable But Requiring New Inflows

Wintermute insists that the general market structure in the crypto market is good. The leverage is lower than in 2022, and the volatility is under control. The over-the-counter trading volumes rose by over 200 percent in 2024, which indicates that the presence of institutions could not be eliminated despite stagnation. Nevertheless, Wintermute cautions that the sustainable recovery will rely on fresh inflows of exchange-traded funds and digital asset tokens. In the absence of such inflows, crypto risks will trail other risk assets.