Wintermute: Institutions Hit Record 72% of Crypto Spot Trading

Institutions accounted for a record 72% of spot trading volume on market maker Wintermute's OTC desk in the first half of 2026, the firm found in its latest report. That is 11 percentage points above the 61% seen in the second half of 2025, and the highest share on record. The market, the report's authors say, is increasingly taking on the traits of its largest participants rather than retail traders, as it did just a couple of years ago.

The report's authors stress this is not a one-off spike but a steady trend over recent quarters. Retail traders partly rotated into equities during the bear market, which is exactly why the underlying demand structure is easier to spot right now. Wintermute calls it "the asset class maturing, whatever recent price action suggests." The authors add that traditional finance went through a similar shift decades earlier, when professional investors gradually displaced the dominance of retail trading on stock exchanges.

Institutions overtook retail in trading volume

The difference in behavior between the two groups explains most of the other numbers in the report. Institutional players typically operate under defined mandates and risk limits, hold positions longer, and react less to daily headlines. Retail traders, by contrast, chase short-term price swings more often and shift positions faster. Wintermute notes that this shift of liquidity toward the first group is what brought down the size of price swings across the market as a whole, not just in a handful of pairs.

By the firm's own account, the result is not just less chaos but a change in the market's underlying structure. Price now moves more often on the back of positioning decisions by funds and trading desks rather than waves of retail buying and selling. That shows up, for instance, in how quickly the market digests fresh headlines: institutional positions shift more gradually, so the price reaction to news is more stretched out over time.

How volatility fell from 70% to 45% this cycle

Realized crypto volatility, per Wintermute's estimate, has dropped from roughly 70% in earlier market cycles to around 45% in the current one. The firm ties this decline directly to institutional dominance. Long-horizon mandates smooth out the price action that short-term, highly leveraged retail trades used to add. Bitcoin and Ethereum, as the most liquid assets, feel this effect first and trade calmer than the rest of the market. For comparison, just two market cycles ago, daily swings of 8-10% in either direction were considered routine even for the largest coins.

Why altcoin rallies are getting more selective

Institutional players trade a far narrower list of tokens than retail participants, who traditionally spread their activity across a much larger number of assets. That concentration means the flow of money increasingly setting market direction is packed into fewer names and traded more selectively than before. Broad-based alt seasons, when most coins rise together, are becoming less likely precisely because of this shift in demand structure. Instead, a handful of large names increasingly drive the market, while the rest of the altcoins react late or barely react at all.

There is a flip side to this. Concentrating liquidity in a small group of assets makes those very assets more sensitive to decisions by large players: if several funds trim positions at the same time, the price move could turn out sharper than it would in an era when volume was spread across thousands of small participants.

Derivatives and tokenization are gaining ground

Notional trading volume in altcoin options on Wintermute's OTC desk rose roughly 3.4 times compared with the second half of 2025. Demand is coming mostly from investors chasing yield rather than plain price exposure to a specific token. At the same time, contracts for difference are increasingly being used for hedging and basket strategies across a wider range of coins than before. That is a separate instrument from options, and its growing use shows institutions are looking for more flexible ways to manage risk rather than just buying or selling an asset outright.

The value of tokenized real-world assets climbed nearly 50% in the first half of the year, to $31 billion, while average monthly transfer volume for those assets more than doubled, to $9 billion. Institutions are mainly buying tokenized Treasuries, money market funds, and private credit. Retail investors, by contrast, remain more active in tokenized equities, where the regulatory bar to entry is lower.

• Broad alt seasons, when most coins rise together, are becoming less likely.
• Tokenized Treasuries and money market funds are the main target of institutional demand, not tokenized equities.
• Wintermute expects retail traders to return in the next bull cycle but does not expect institutional influence to fade afterward.

What this means for the market going forward

The report's authors see no reason for the institutional share to fall back to 2025 levels, even once retail interest picks up again with the next crypto bull cycle. Instead, they expect the market to keep shaping itself mostly around professional investors' mandates. It is those mandates, not short-term retail trades, that increasingly set liquidity, pricing, and the very list of assets that attract capital. That does not mean retail trading disappears, rather its role shifts from price driver to one of many participants alongside large funds.

For everyday users, that has a fairly practical upshot. Deeper institutional liquidity in the largest pairs means tighter spreads even during bouts of higher volatility. For anyone planning to exchange Bitcoin for dollars, that in practice often means smaller losses to the spread than a few years back. At the same time, more selective altcoin rallies and the growing tokenized-asset market show that crypto market structure will keep converging with traditional finance through the second half of 2026, rather than moving the other way.