Wintermute: Whether the market can recover in 2026 depends on three major factors, and the market urgently needs a surge of enthusiasm.

Crypto market maker Wintermute analyzes in its digital asset OTC trading market review: The traditional four-year cycle of Bitcoin in 2025 performed weakly, and the altcoin cycle has almost disappeared. This is not a temporary correction but a structural change.
Therefore, for the crypto market to truly rebound strongly in 2026, it heavily relies on the following three key outcomes, with at least one of them occurring: ETF and Digital Asset Custody (DAT) companies will expand their investment scope beyond Bitcoin and Ethereum. Currently, the liquidity of US spot BTC/ETH ETFs is highly concentrated in a few large-cap tokens, leading to a narrowing market breadth and severe performance divergence. Only when more tokens are included by institutions through ETFs or corporate vaults can broader market participation and liquidity be restored.
Major assets like BTC, ETH, BNB, SOL, and others will once again show strong performance and generate widespread wealth effects. In 2025, the traditional cycle of “BTC rising followed by funds flowing into altcoins” was fundamentally broken, with the average altcoin rally lasting only about 20 days (compared to about 60 days the previous year). Most tokens continued to decline due to unlocking sell pressure. Only when leading assets surge again can funds spill over downward, activating altcoin markets. Retail investor attention will return to the crypto market.
Currently, retail investors are still actively participating, but their funds are mainly invested in high-growth themes such as the S&P 500, AI, robotics, and quantum computing. The painful memories of 2022-2023 (crashes, bankruptcies, forced liquidations) combined with the underperformance of crypto in 2025 compared to traditional stock markets have significantly reduced the attractiveness of crypto “get-rich-quick” schemes. Only with a large-scale return of retail investors can the market regain its enthusiasm.