Crypto Liquidity Stayed in Bitcoin and Ethereum as Altcoin Growth Faded in 2025

The year 2025 confirmed a clear concentration of crypto liquidity in Bitcoin and Ethereum, while most altcoins were largely sidelined. This conclusion comes from Wintermute’s annual OTC digital assets market review. According to the report, investors focused primarily on Bitcoin, Ether, and a small number of large-cap tokens. This marked a significant departure from previous crypto cycles, when capital tended to rotate broadly across altcoins. In 2025, liquidity flowed from the top down—mainly through ETFs and digital asset trusts (DATs)—leading to heavy capital concentration in the largest assets. Wintermute noted that ETFs expanded their scope by introducing features such as staking exposure, while DATs broadened their mandates to allocate more capital into Bitcoin and Ethereum.

How Crypto Market Liquidity Shifted in 2025 Trading behavior in 2025 differed sharply from prior years. Wintermute observed that institutional investors remained consistently overweight in major crypto assets from the second quarter onward, particularly in BTC and ETH. Institutions traded strategically and reacted quickly to macroeconomic and political headlines. A notable example occurred in early April 2025, when comments from Donald Trump regarding tariffs triggered a rapid shift of capital into Bitcoin. At the start of the year, institutions were underweight major benchmarks and remained net sellers throughout the first quarter. Bitcoin liquidity and positioning peaked in May and June 2025. According to BTCsats data, Bitcoin’s average price in May exceeded $103,400, with highs approaching $112,000 and lows near $93,400. In June, the average price climbed to nearly $105,700, with intraday highs above $110,500, and the month closed close to $107,100.

A Turning Point for Retail Investors Wintermute highlighted a notable shift in retail behavior. Since 2022, retail investors had consistently sold Bitcoin and Ethereum while reallocating capital into altcoins. That pattern reversed in 2025. While large players absorbed most liquidity in major assets, altcoins followed a different trajectory. Retail investors briefly returned to altcoins during the second and third quarters, fueled by hopes of a traditional “altcoin season.” However, this optimism coincided with a sharp buildup of leverage. The so-called “10/10” move triggered a violent, forced market sell-off, resulting in approximately $19 billion in liquidations within 24 hours. Prior to the event, leverage in altcoins had accumulated unevenly and without sufficient liquidity support.

Open Interest Collapsed as Altcoins Lost Momentum Total open interest across crypto markets reached roughly $230 billion, according to Wintermute. Of that amount, around $70 billion was concentrated outside Bitcoin and Ethereum. Following the market flush, most of these positions were unwound. Altcoin open interest fell by approximately 55% by mid-December, dropping to around $30 billion. Altcoin performance deteriorated sharply in 2025. Aside from brief, isolated rallies, most projects failed to sustain meaningful gains. Wintermute noted that the median duration of altcoin rallies fell to just 20 days, compared with 45 to 60 days in 2024, signaling weaker conviction and increasingly tactical risk-taking.

OTC and Options Activity Accelerated Despite Muted Prices Despite subdued price action, OTC trading activity in digital assets increased significantly. Wintermute’s review shows that counterparty interactions intensified as investors increasingly favored off-exchange trading for discretion and capital efficiency. The number of OTC trades rose approximately 2.1x compared with Q1 2025, while notional trade value in the fourth quarter surged 3.8x, indicating both higher trading frequency and larger position sizes. Strong demand for OTC desks suggests that institutional and sophisticated investors remained active, even as overall crypto price momentum slowed.

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