Wintermute: Crypto Market’s Four-year Cycle No Longer Works

• At Wintermute, they pointed to the classic four-year crypto market cycle losing relevance.
• Experts explained why 2026 will be a test year for altcoins and liquidity.
• In addition, they proposed three scenarios for how the market could change this year.

Market maker Wintermute said that the classic four-year crypto market cycle has effectively lost relevance, and that 2025, despite the absence of the expected rally, could go down in history as the start of crypto’s transition from a speculative instrument to a more mature asset class.

The company noted that market dynamics are no longer driven by “self-fulfilling timing narratives.” Instead, the key factor is where liquidity flows and what investors focus on. 

As the report noted, historically, capital within the crypto market moved through a familiar pattern: Bitcoin’s rise fueled Ethereum, then large-cap altcoins, and then the broader market. However, according to Wintermute’s OTC flow data, this mechanism weakened significantly in 2025.

One of the reasons was ETFs and crypto treasuries (DAT), which have turned into a kind of “walled garden.” They provide steady demand for large assets, but do not encourage capital rotation into the broader market. 

Against the backdrop of retail attention flowing out toward the stock market, 2025 became a period of extreme capital concentration, according to analysts.

This is especially noticeable in the altcoin segment. According to a recent Wintermute estimate, in 2025 the median duration of altcoin rallies fell to 20 days, compared with about 60 days in 2024.

The company noted that investors are increasingly favoring bitcoin and Ethereum amid growing macroeconomic uncertainty. At the same time, speculative activity among retail players is shifting into other niches — from memecoins to prediction markets.

At the same time, Wintermute analysts outlined three possible paths that could broaden the market beyond a handful of large assets in 2026.

The first scenario is an expansion of ETF and DAT mandates. A significant share of new liquidity is currently staying within institutional channels, and a broader recovery is only possible if their investment universe expands. At Wintermute, the first signals of this approach are filings for ETFs linked to Solana (SOL) and XRP (XRP).

The second option is a strong rally in bitcoin or Ethereum. Such a move could create a wealth effect and restart capital rotation into the broader market, as it did in 2024. At the same time, the amount of capital that will actually return to digital assets remains uncertain.

The third scenario is a return of retail investor attention. If interest shifts from AI-related stocks, rare earth metals, or quantum technologies back to the crypto industry, it could bring fresh capital inflows and stablecoin issuance. Wintermute called this option the least likely, but one that could significantly broaden market participation.

As a reminder, BitMEX co-founder and Maelstrom fund CIO Arthur Hayes shares a similar view on the four-year cycle being outdated. According to him, monetary policy and global financial conditions will shape market dynamics in the coming years.