Institutional investors are now exerting a more profound influence on the crypto market than retail traders, marking a turning point in what Wintermute describes as the evolution of digital assets.

According to the firm's latest market report, institutional investors accounted for approximately 72% of spot trading volume on its over-the-counter (OTC) desk during the first half of 2026—an all-time high and a significant increase from the roughly 61% recorded in the second half of the previous year.

"As the crypto market endured a bear phase, with retail investors largely absent and focused on equities, the market structure became clearer," the report noted. "Regardless of near-term price action, the asset class is maturing."

Institutional investors typically do not chase short-term price fluctuations; instead, they operate under clear mandates and risk limits, maintaining positions for longer periods. The report indicates that this results in lower market volatility and liquidity concentrated within a smaller group of assets.

Wintermute’s analysis shows that realized volatility has dropped from around 70% in earlier market cycles to approximately 45% in the current cycle. The report also found that institutional investors trade a relatively narrow range of tokens, whereas retail investors continue to spread their trading activity across a wider array of assets.

This concentration could make future altcoin rallies more selective.

"The result is that the capital flows driving market direction are increasingly concentrated in a few names, making trading more selective," the report stated. It added that as institutional capital focuses on a limited number of assets, broad-based rallies—where the majority of alternative cryptocurrencies rise in unison—are becoming increasingly unlikely.

**Growing Interest in Derivatives and Tokenization**
The report also highlighted the rising use of derivatives as another significant trend. Wintermute noted that the notional trading volume of altcoin options on its OTC desk grew roughly 3.4-fold between the second half of 2025 and the first half of 2026, driven primarily by investors seeking yield rather than pure price exposure. Meanwhile, Contracts for Difference (CFDs) are being utilized across a broader range of cryptocurrencies for directional trading, hedging, and diversification strategies. Beyond trading, the tokenization of real-world assets continues to gain momentum; the value of tokenized assets climbed nearly 50% to $31 billion in the first half of this year, while average monthly transfer volumes more than doubled to reach $9 billion. The firm noted that institutional adoption focuses primarily on tokenized Treasury bills, money market funds, and private credit, whereas retail investors are more active in tokenized equities.

While Wintermute anticipates a resurgence of retail participation in the next crypto bull market, it believes institutional influence is unlikely to wane. Instead, the firm suggests that the market is increasingly reflecting the characteristics of its largest participants, with professional investors shaping liquidity, pricing, and the types of assets that attract capital.

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DeFi stands for "Decentralized Finance," also known as "Open Finance." It operates without the need for trusted intermediaries, benefiting individuals who previously lacked access to such financial services. Consequently, a mature market for trading financial assets has emerged within the DeFi space, with the vast majority of DeFi projects currently running on the Ethereum blockchain. A blockchain can be understood as a digital ledger jointly maintained by multiple participants, offering a high degree of resistance to tampering.

To illustrate with a simple example:

Traditional ledger: Managed by a single bank.

Blockchain ledger: Jointly maintained by numerous computers around the world; each computer holds a copy and participates in data verification, making it extremely difficult for anyone to secretly alter the records.