Wintermute reveals the 3 key conditions for a real return of the crypto market this year

The crypto market is entering a zone of major uncertainty. According to Wintermute, the historical four-year cycle, a mainstay of investment strategies for more than a decade, may have reached its limits. In a report published at the beginning of January, the market maker evokes a profound rupture in 2025, a strong signal that 2026 will not be a simple rebound, but a real test of resilience for an ecosystem in full redefinition.

The erosion of a historical cycle

According to Wintermute, the year 2025 marks a clear break with the traditional pattern of the crypto market, as crashes become more and more common.

“The year 2025 has shown that the traditional four-year cycle tends to become obsolete”, asserts the report. The cyclical model, long seen as a reliable compass for investors, no longer seems to have the same impact.

The phenomenon of “recycling”this mechanism by which gains made on bitcoin and Ether are then reinjected into altcoins, has shown clear signs of running out of steam. The market maker highlights a drastic fall in “market breadth”that is to say the ability of the market to see several assets progress in parallel.

Wintermute identifies several concrete elements having contributed to this break in the cycle:

• A reduction in the average duration of altcoin rallies: around 20 days in 2025, compared to 60 days the previous year, reflecting a rapid exhaustion of bullish phases excluding BTC/ETH;

• The concentration of liquidity: capital has massively flowed towards a handful of assets “large caps”due in particular to the emergence of spot Bitcoin ETFs in the United States;

• Increased dominance of institutional flows: “liquidity has been concentrated in a small group of large-cap assets”notes Wintermute, describing a market increasingly polarized around major assets;
• The absence of narrative rotation: unlike previous cycles, few emerging tokens have benefited from prolonged enthusiasm or speculative narratives strong enough to carry their prices.

This structural change implies a rebalancing of market dynamics, now driven upwards by institutional management logic and no longer by mass effects or speculation.

Three levers for a crypto rebound this year

Faced with this severe diagnosis, Wintermute does not just observe. The company is mapping out three exit scenarios.

First, she envisions ETFs and crypto treasury companies expanding their mandate beyond BTC and ETH. This institutional diversification would redistribute liquidity to other assets and revive market depth.

Then, the hypothesis of a strong rebound in bitcoin and Ether remains on the table: a sufficiently marked performance could generate a “wealth effect” conducive to a broader recovery. Finally, the return of individual investors is identified as a decisive factor. “The return of attention from retail investors” writes Wintermute, while recognizing that it is currently oriented towards artificial intelligence, stock markets and raw materials.

But bringing back individual investors will not be an easy task. The after-effects of the 2022–2023 bear market, massive losses, resounding bankruptcies and cascading liquidations, are still fresh in people's minds. Furthermore, in 2025, BTC and ETH generally underperformed against sectors such as AI, robotics or space, which reinforced the disinterest of small holders.

Wintermute observes that individuals now prefer cautious strategies, such as dollar-cost averaging on the S&P 500, or are moving towards more promising technological themes in the short term.

Beyond investor behavior, monetary policy will also play a decisive role. Owen Lau, director at Clear Street, believes that one of the major catalysts for the crypto market will be linked to the action of the US Federal Reserve: “Fed rate cuts are among the main catalysts for the crypto market in 2026”. Monetary easing, with lower rates, could stimulate appetite for risk and encourage a return of capital to cryptos.

The power law model predicts a major test for bitcoin. If 2026 were to confirm this hypothesis, the market will have to demonstrate that it can evolve without its old benchmarks. More than a cycle, it is a new reading of crypto dynamics that is emerging, where only solid catalysts will make the difference.