Crypto recovery remains slow despite global liquidity boost: Wintermute

Global liquidity is rising, stocks are soaring, and interest rates are falling but crypto markets are not bouncing back. Wintermute says why.
Summary

• Wintermute reports that crypto is underperforming despite global liquidity expansion and rate cuts.
• The report says liquidity is flowing into equities, AI, and prediction markets, not crypto.
• Wintermute says the four-year Bitcoin halving cycle no longer explains price movements.
• Recovery depends on renewed ETF inflows and institutional activity in DAT markets.

Despite a favorable macroeconomic environment, the cryptocurrency market continues to underperform other risk assets, according to Wintermute’s latest market update dated Nov. 3. The report highlights that although global liquidity is expanding with central banks cutting interest rates, ending quantitative tightening (QT), and stock markets sitting near all-time highs, capital is not flowing into crypto markets at the same pace.

Wintermute attributes this underperformance to a redirection of liquidity. While financial conditions have improved globally, the inflows are primarily targeting equities, artificial intelligence (AI) sectors, and prediction markets. In contrast, ETF inflows and Digital Asset Treasury (DAT) activity, which were key drivers of crypto growth earlier in the year, have largely stalled.

“The tap isn’t off, it’s just pointed somewhere else,” the report noted. Stablecoin supply remains the only inflow metric showing growth, with over $100 billion added year-to-date. Meanwhile, Bitcoin ETF assets under management have stagnated around $150 billion, and secondary DAT volumes have plummeted.

Market data reinforces this slowdown. BTC (BTC) and ETH (ETH) have both been range-bound, with Bitcoin hovering near $101,000 and Ethereum around $3,300. The broader market also suffered heavy losses last week gaming, layer-2s, and meme coins recording double-digit drops.

Wintermute says four-year Bitcoin cycle is dead

Wintermute also argues that the traditional four-year Bitcoin cycle theory is no longer relevant. The firm believes that price performance in mature markets like crypto is now driven primarily by liquidity flows, not miner supply or halving events. This shift requires investors to adjust their expectations and closely monitor macro conditions and institutional behavior.

The crypto market structure, however, remains fundamentally healthy. Leverage has been flushed out, volatility is subdued, and positioning is cleaner than earlier in the year. Despite the current stagnation, the firm remains cautiously optimistic that renewed ETF or DAT inflows could signal the next leg of crypto’s recovery.

For now, however, crypto remains the weakest performer among global risk assets. Bitcoin and Ethereum ETFs have been on a 5-day outflow streak. Until capital begins flowing back into crypto-specific instruments, recovery will remain slow, even in an environment of abundant liquidity.