Crypto Market Splits as Institutions Stick to BTC and ETH While Retail Hunts for New Altcoin Gems: Wintermute
A growing divide is reshaping the crypto market, with institutional investors increasingly focusing on blue-chip assets like bitcoin (BTC) and ether (ETH), while retail traders chase newer altcoins and memecoins, according to a mid-year report from crypto trading firm Wintermute.
Even within the altcoin space, retail investors are shifting attention away from older favorites like dogecoin (DOGE) and shiba inu (SHIB) toward emerging tokens such as BONK, POPCAT, and dogwifhat (WIF).
Wintermute’s analysis of over-the-counter (OTC) spot trading shows institutional trading volumes in BTC and ETH holding steady at 67%, buoyed by inflows from ETFs and structured investment products. Meanwhile, retail participation in these two leading cryptocurrencies has dropped from 46% to 37%, as retail traders pivot to more speculative assets.
“This divergence isn’t a temporary blip—it’s evidence that the crypto market is evolving into a more mature and specialized ecosystem,” said Evgeny Gaevoy, Wintermute’s CEO and founder. “Institutions are viewing crypto through a macro lens, while retail traders remain driven by innovation and new opportunities.”
Traditional finance (TradFi) institutions were the fastest-growing segment in OTC activity, recording a 32% increase in trading volumes year-over-year. This growth has been fueled by greater regulatory clarity, such as the U.S. GENIUS Act and the European Union’s MiCA regulations, which have emboldened institutional investors to engage more actively in crypto markets.
Retail brokerages also posted strong gains, with OTC volumes rising by 21% over the same period. Meanwhile, crypto-native firms saw a slight 5% drop in activity.
The appetite for crypto derivatives is surging, Wintermute noted. OTC options volumes skyrocketed 412% compared to the first half of 2024, as institutions increasingly turned to derivatives for hedging and yield strategies. Contracts for Difference (CFDs) also doubled in diversity, allowing traders to access smaller, less liquid tokens in a more capital-efficient way.
Wintermute reported that its own OTC desk saw spot trading volumes grow at more than twice the pace of centralized exchanges, underscoring the trend toward larger, discreet trades favored by institutional players.
Meanwhile, memecoin trading has become more fragmented. Although overall retail interest in memecoins has dipped, the number of different tokens traded by individual users has doubled, signaling an expanding appetite for micro-cap assets scattered throughout the market’s long tail.
Legacy memecoins like DOGE and SHIB are losing ground to new entrants like BONK, WIF, and POPCAT, the report said.
Looking ahead, Wintermute analysts pointed to the upcoming decision on spot dogecoin ETFs as a potential catalyst for retail markets, with regulators expected to make a ruling by October.
“The result could significantly influence retail sentiment and pave the way for broader acceptance of other alternative crypto assets,” the report concluded.
