Wintermute Warns Crypto Liquidity Has Stalled — “Money Has Stopped Flowing In”

Key TakeawaysWintermute says crypto market liquidity growth has stalled, signaling a slowdown in new capital inflows.Stablecoins, ETFs, and DATs have expanded from $180 billion to $560 billion since early 2024, but fresh capital has largely stopped entering the system.Capital is now rotating internally within existing crypto assets, limiting market breadth and cutting short post-dip rallies.Analysts warn this liquidity stagnation may cap upside momentum even as prices stabilize.Wintermute: “Liquidity Drives Crypto Cycles — and Now It’s Drying Up”According to a recent market commentary from Wintermute, one of the largest crypto market makers, liquidity remains the defining force behind every crypto cycle — and current data suggests inflows are fading.While the total market capitalization of stablecoins, ETFs, and Digital Asset Tokens (DATs) surged from roughly $180 billion in early 2024 to about $560 billion, Wintermute notes that the rate of growth has sharply decelerated in recent months.“The money has stopped flowing in,” the firm stated, pointing out that new liquidity — the fuel that typically drives multi-month rallies — has largely dried up, leaving markets dependent on recycled capital rather than fresh inflows.Internal Rotation Limits Market BreadthWintermute’s analysis indicates that while existing capital continues to move within the crypto ecosystem, this internal rotation has produced narrower market breadth. Gains are increasingly concentrated among a handful of large-cap tokens, while smaller assets and altcoins struggle to sustain rebounds.This dynamic explains why many recent rallies have fizzled quickly after short bursts of momentum. With fewer external participants entering the market, price surges often lack follow-through and fade once leverage or sentiment shifts.Broader Market ContextThe slowdown in liquidity mirrors macro headwinds such as a stronger U.S. dollar, tighter funding conditions, and declining speculative leverage in derivatives markets. Together, these factors have made it difficult for new money to enter the space despite rising institutional infrastructure like crypto ETFs.Wintermute’s takeaway is clear: unless new liquidity channels reopen, crypto markets may remain in a rotational, range-bound phase marked by uneven performance and periodic bursts of volatility.