Wintermute Says AI Trade Is Draining Capital From Crypto

Crypto market maker Wintermute believes the huge growth in artificial intelligence investments has pulled liquidity away from digital assets for months. Therefore, slowing crypto’s momentum in the process.

In a recent market commentary, Wintermute argued that AI has been “vacuuming up available capital at the expense of everything else.” According to the firm, crypto may struggle to outperform until “air comes out of the AI trade.” The statement adds to a growing debate about sector rotation in global markets, as investors continue pouring funds into AI-linked equities.

AI Stocks Surge as Crypto Lags

Throughout 2025, AI-focused companies have delivered massive returns. Stocks like Nvidia have posted gains exceeding 200%, driven by relentless demand for AI chips, cloud infrastructure and enterprise automation tools. Institutional investors have heavily weighted their portfolios toward AI leaders, betting on long-term structural growth.

By contrast, Bitcoin and the broader crypto market have seen more moderate gains. While digital assets remain well above previous cycle lows, they have not matched the pace of AI equities. Wintermute attributes part of this divergence to capital allocation trends.

As a major liquidity provider handling billions of dollars in daily crypto trading volume, Wintermute tracks fund flows and market positioning closely. The firm suggests that large pools of capital have rotated toward AI, leaving fewer fresh inflows for crypto markets.

Liquidity Cycles and Sector Rotation

Financial markets often move in cycles. When one sector captures investor attention and delivers strong returns, capital tends to concentrate there. Eventually, valuations stretch and risk appetite shifts.

Wintermute’s analysis implies that crypto’s next strong rally may depend on a cooling period in AI equities. If AI valuations correct or investor enthusiasm fades, capital could rotate back into alternative growth sectors, including digital assets.

However, some market participants caution that a sharp correction in AI stocks could trigger broader market volatility. In that scenario, both equities and crypto might face short-term pressure before stabilizing.

What Comes Next for Crypto?

The discussion highlights a key reality, that crypto does not trade in isolation. Broader liquidity conditions, macroeconomic trends and investor sentiment all influence performance.

If AI’s dominance begins to fade, crypto could benefit from renewed inflows. Until then, Wintermute’s view suggests that the digital asset market may remain in a waiting phase, watching closely for signs that the capital tide is ready to turn.

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