The macro backdrop couldn’t be more supportive for risk assets, rate cuts, an end to quantitative tightening, and equity markets hovering near record highs. Yet, despite that, crypto continues to underperform, according to Wintermute’s 3 November 2025 update.
While global liquidity is expanding, the capital isn’t flowing into digital assets as it once did. ETF inflows have stalled, DAT (digital asset tokenization) activity has dried up, and only stablecoin growth remains robust. The result: a market with solid structure but lacking the inflow spark needed to reignite momentum.
The week following the Federal Reserve’s 25 basis point rate cut was expected to be bullish for risk assets. Quantitative tightening officially ended, and major U.S. tech earnings — especially from the “Mag7”, landed better than feared. However, markets wobbled after Fed Chair Jerome Powell downplayed the likelihood of another cut in December, forcing traders to rotate out of risk-heavy positions.
Equities quickly recovered, but crypto failed to bounce. Bitcoin and Ethereum traded flat near $107,000 and $3,700, respectively, while most altcoins saw broad losses. Wintermute described it as a “classic travel-and-arrive” setup, traders priced in good news ahead of time and took profits immediately after.
The heart of the issue isn’t liquidity scarcity, it’s liquidity distribution.
Wintermute notes that global liquidity is rising, with central banks easing into strength rather than weakness, a rare occurrence that historically supports strong risk-on environments. But unlike previous cycles, the new liquidity isn’t trickling into crypto.
Of the three key inflow engines that powered the first half of 2025, ETFs, stablecoins, and DATs, only stablecoins are still expanding, up over $100 billion year-to-date.
ETF assets under management have plateaued around $150 billion, and secondary DAT volumes have fallen sharply. “The tap isn’t off,” Wintermute explains. “It’s just pointed somewhere else.”
Retail enthusiasm has also cooled as investors chase momentum in equities, AI stocks, and prediction markets, leaving crypto in consolidation mode.
According to Wintermute’s GMCI-30 index, the broader crypto market fell 12% in the final week of October, with notable declines across sectors:
Only AI (-3%) and DePIN (-4%) tokens showed resilience, buoyed by continued strength in projects like TAO and agent-based ecosystems earlier in the week. The move, Wintermute said, was “flow-driven rather than fundamental,” consistent with post-FOMC liquidity repositioning.
Despite underperformance, Wintermute emphasized that crypto’s market structure remains strong, leverage has been flushed, volatility is contained, and ETF inflows, while muted, remain steady. Bitcoin continues to act as the market’s anchor, while Ethereum and select L1/L2 networks are showing early signs of relative strength.
The key to the next leg higher, according to Wintermute, lies in ETF and DAT activity picking back up. “Liquidity isn’t the problem,” the report concludes. “It’s where the liquidity is going.”
