Wintermute Data Shows Crypto’s Slow Recovery Amid Global Liquidity Growth

TLDR

• Global liquidity rises, but crypto sees little benefit as funds move to stocks.
• AI stocks and prediction markets absorb most new capital, leaving crypto behind.
• Stablecoins grow, but Bitcoin and Ethereum struggle to attract significant inflows.
• The Bitcoin halving cycle no longer triggers the expected price surges in 2024.

Despite a global rise in liquidity, cryptocurrencies have failed to benefit from the surge, leaving them behind in favor of stocks and AI-linked assets. According to Wintermute’s latest report, while the market sees capital flowing into traditional financial sectors and technological innovations, the crypto market continues to underperform. This shift is raising concerns about the future of digital assets and the lack of significant inflows into crypto despite stablecoin growth.

Global Liquidity Expands, But Crypto Lags Behind

Wintermute’s recent findings show a notable increase in global liquidity, driven by central banks worldwide. Since mid-2024, major institutions like the Federal Reserve, European Central Bank, and the People’s Bank of China have loosened their monetary policies. These actions, which include rate cuts and new liquidity programs, have expanded the international M2 money supply.

However, despite this liquidity surge, the crypto sector has seen little benefit. Wintermute reports that funds are being diverted primarily to traditional markets, with a clear focus on equities, particularly those linked to artificial intelligence and prediction markets.

“The influx of new capital has mostly bypassed the cryptocurrency space, leaving digital assets struggling to gain traction,” the report states. This trend highlights the growing disconnect between financial recovery and the performance of crypto assets.

Funds Flock to Stocks and AI, Leaving Crypto Behind

According to the data, the rise in liquidity has been largely absorbed by the stock market and AI-related sectors. The report reveals that stock indices are nearing all-time highs, with investors increasingly betting on the future of AI technologies. In particular, companies tied to AI advancements and predictive market platforms like Polymarket are attracting significant capital.

“AI-linked stocks and prediction markets have become the main beneficiaries of this liquidity expansion,” the report notes. The crypto market, on the other hand, is showing little to no growth.

Bitcoin and Ethereum, two of the most prominent cryptocurrencies, have not seen substantial inflows, further emphasizing the sector’s underperformance in 2025. This shift signals a preference for more traditional or emerging technologies rather than digital currencies, which are still struggling with their broader adoption.

Stablecoin Growth, but Limited Impact on Overall Crypto Market

Despite the downturn in mainstream cryptocurrencies, stablecoins have continued to show growth. The market capitalization of popular stablecoins like USDT and USDC has steadily risen through 2024 and into 2025. However, this development has not been enough to reverse the overall stagnation in the crypto sector.

Wintermute highlights that while stablecoin growth reflects increased usage and adoption, it has not translated into a broader crypto market recovery. Bitcoin, in particular, has seen minimal movement since the approval of Bitcoin ETFs in 2024. The lack of a strong rally following the halving event in April 2024 further signals investor hesitation.

Shift in Market Dynamics and New Challenges for Crypto

The Wintermute report suggests that the traditional four-year Bitcoin halving cycle, once a significant price driver, may no longer play a major role in market movements. The latest halving did not result in the usual post-halving surge. “The traditional halving cycle no longer has the same impact on the market, with liquidity and macroeconomic factors now taking precedence,” Wintermute concludes.

This change is attributed to evolving investor behavior, with institutional and retail investors reacting more to macroeconomic trends than to Bitcoin-specific events. As liquidity flows shift in response to broader financial factors, digital assets are being affected differently compared to other risk assets.

Market Recovery Depends on Fresh Inflows

While Wintermute acknowledges that the crypto market is currently stable, with reduced leverage and controlled volatility, it stresses the importance of new inflows to ensure a sustainable recovery.

The report points out that over-the-counter trading volumes surged in 2024, indicating the continued presence of institutional investors. However, without fresh capital coming in through mechanisms like exchange-traded funds (ETFs) or tokenized assets, crypto may continue to lag behind other markets in terms of growth.

As the report concludes, “The health of the crypto market remains dependent on attracting new investors. Without new inflows, digital assets risk being overshadowed by more established sectors like stocks and AI.”

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