TLDR:
- Wintermute says global liquidity is expanding, but most new money is moving into equities and AI, not crypto.
- ETF and DAT inflows have stalled, leaving stablecoins as the only growing segment in digital assets.
- Bitcoin and Ethereum remain range-bound as traders await renewed inflows following the Fed’s rate cut.
- Wintermute rejects the four-year cycle theory, saying liquidity is now the key driver of crypto prices.
Crypto’s momentum has stalled even as global liquidity improves. Traders expected rising prices after central banks eased policy, yet funds are heading elsewhere.
According to Wintermute’s latest market update, investors favor equities and AI over digital assets. Stablecoins remain the only expanding segment, while ETF and DAT inflows show no revival.
The firm said the four-year crypto cycle no longer applies as liquidity drives the next phase of price movement.
Liquidity Expands but Crypto Misses the Flow
In its November 3 update shared on X, market maker Wintermute (@wintermute_t) said liquidity is expanding worldwide as central banks cut rates and quantitative tightening winds down.
Despite these favorable conditions, crypto markets have yet to benefit. The firm noted that most new capital is rotating into stocks and artificial intelligence sectors, leaving crypto sidelined.
Wintermute described the current setup as a “clean positioning” environment, with leverage flushed and market structure stable. Even so, Bitcoin and Ethereum have traded in tight ranges since the recent U.S. Federal Reserve meeting.
BTC hovered near $107,000, while ETH lingered around $3,700. Both failed to mirror the quick rebound seen in equities following the rate cut.
The company’s report also pointed out that the 25 basis point cut by the Fed was fully priced in before the meeting. Traders who leaned too bullish ahead of the decision were forced to unwind positions afterward. This rotation pushed risk capital away from crypto, slowing the market’s reaction to macro easing.
Wintermute said the shift does not signal panic but reflects repositioning. The lag in crypto performance, compared to equities, suggests investors are still waiting for a clear trigger.
The firm identified ETF inflows or a pickup in DAT activity as the likely catalysts for the next leg of growth.
Stablecoin Supply Grows While ETFs Stall
Wintermute’s analysis showed that while broader crypto prices remain flat, stablecoins continue to expand. This growth indicates capital waiting on the sidelines rather than exiting the market.
Yet, without renewed flows into ETFs or digital asset tokens, a sustained rebound seems distant.
The report dismissed the long-held “four-year cycle” theory, arguing that liquidity now dictates price direction more than time-based cycles. This marks a shift from the usual halving-driven narratives, as institutional flows increasingly shape market behavior.
According to Wintermute, ETF inflows have stalled since post-FOMC volatility hit. DAT activity, often seen as a measure of speculative energy in decentralized markets, has dried up. Until both pick up, crypto prices may continue to trail other risk assets.
Still, the company maintained that crypto’s core structure remains solid. Leverage has been cleared, and volatility is contained, giving the space a healthier foundation than during past downturns. The problem, it said, is not structure, but liquidity.
The post Crypto Lags Behind as Liquidity Shifts to Stocks and AI: Wintermute Report appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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