"Bitcoin has fallen over 50%, yet we don't see a 'panic sell-off'? The acceleration of institutionalization is reshaping the logic of the crypto bear market."

Despite being in a prolonged bear market and experiencing a significant price drop from historical highs, a profound change is occurring within the cryptocurrency market. A recent report from cryptocurrency market maker Wintermute indicates that institutional investors, such as hedge funds and asset management firms, are quietly replacing retail investors as the primary providers of liquidity in the crypto market, driving a gradual shift towards a more institutionalized market structure. Data shows that in the first half of 2026, institutional investors accounted for 72% of Wintermute's over-the-counter (OTC) spot trading volume, a significant increase from 59% during the same period in 2025. Notably, this change is occurring against the backdrop of a continued decline in overall cryptocurrency trading volume, highlighting that Wall Street capital is progressively becoming the dominant force in the market, which to some extent has diminished the characteristic volatility previously seen in the crypto market. Wintermute analysts noted that the crypto market initially relied heavily on retail speculation and momentum trading, but the current prolonged stagnation reflects that professional institutional traders are gradually gaining control over market pricing power. The report states, "These trends indicate that the cryptocurrency market is entering a more institutionally dominated market structure, with capital increasingly concentrated, derivatives becoming an important tool for institutions to express investment views, and tokenized assets beginning to form a secondary market with a certain scale." Wintermute believes that not only is the number of institutional investors increasing, but their ways of participation are also changing. Instead of directly buying cryptocurrencies like Bitcoin and Ethereum, an increasing number of institutions are starting to gain crypto asset exposure through derivatives, structured products, and exchange-traded funds (ETFs). This trend is evident not only in the Bitcoin and Ethereum markets but is also gradually expanding to altcoins. Data indicates that in the first half of this year, the trading volume of altcoin options on Wintermute's OTC platform increased over threefold compared to the second half of last year. However, market liquidity is increasingly concentrating on a small number of mainstream tokens, and the trend of capital divergence is becoming more pronounced. At the same time, institutional investors are also more cautious in their investment choices compared to retail investors. Wintermute data shows that over the past two years, the number of token types traded by professional institutions has only increased by 24%, while the number of tokens traded by retail investors has grown by 76%, indicating that institutions prefer assets with higher liquidity and more mature fundamentals. Alistair Byas-Perry, Head of Capital Markets and Investment for Europe, the Middle East, and Africa at digital asset management firm 21Shares, stated that an increasing number of asset management and wealth management firms are beginning to conduct more rigorous due diligence on crypto assets, with investment decisions becoming noticeably more rational. The structural changes in the market have made this round of Bitcoin bear market different from previous ones. Although Bitcoin is currently down about 50% from its historical peak of over $126,000 in October of last year, the overall trend is more inclined towards a slow decline rather than the sharp collapses commonly seen in previous "crypto winters." Stephen Coltman, Head of Macro Research at 21Shares, stated, "Today, cryptocurrencies are trading more like other mature asset classes." Regarding the future market, some institutions believe that the market may be approaching a bottom, but they generally maintain a cautious stance. Coltman stated, "Whether the market has already hit bottom can only be confirmed in hindsight. There are indeed some signs that may suggest we are close to a bottom, but no one can be certain about what happens next."