The post Why Liquidity Matters More Than Cycles appeared on BitcoinEthereumNews.com.

AltcoinsBitcoin The crypto market’s underwhelming performance in 2025 may end up being more significant than it first appeared. Instead of delivering the explosive, broad-based rally many investors expected, the year exposed how deeply the market’s structure has changed. According to a new report from Wintermute, the familiar four-year boom-and-bust cycle is no longer the dominant force shaping crypto returns. Key Takeaways The traditional four-year crypto cycle is losing relevance, with market performance now driven more by where liquidity and investor attention are concentrated. Institutional vehicles like ETFs are bringing steady inflows, but that capital is largely confined to a small group of large-cap assets and rarely spreads across the broader market. Crypto’s outlook for 2026 depends on whether liquidity broadens through expanded ETF mandates, a strong rally in major assets, or a return of retail investor interest.  Rather than moving in lockstep, capital is now behaving selectively. Liquidity is concentrating where investor attention is strongest, leaving much of the market disconnected from headline price moves in Bitcoin and other large assets. In previous cycles, gains in Bitcoin naturally spread outward into major altcoins and eventually smaller tokens. That transmission mechanism, however, appears to be breaking down. Institutional Capital Builds Walls, Not Waves One of the biggest structural shifts highlighted in the report is the rise of institutional investment vehicles. Products such as ETFs and digital asset trusts have become major entry points for new capital, but they operate more like closed ecosystems than open pipelines. While they can create sustained demand for a narrow set of large-cap assets, that liquidity rarely spills over into the rest of the market. At the same time, retail interest has drifted away from crypto toward equities and thematic trades like AI and commodities. The result in 2025 was extreme concentration: a small group of…

---

Filed under: News - @ January 14, 2026 2:27 am