Wintermute: Bitcoin's Traditional 4-Year Cycle Has Changed, 2026 Market Recovery Heavily Relies on Three Key Factors

Odaily News Cryptocurrency market maker Wintermute analyzed in its digital asset OTC market review: Bitcoin's traditional four-year cycle performed weakly in 2025, and the altcoin cycle almost disappeared. This is not a temporary adjustment but a structural change. Therefore, for the crypto market to achieve a truly strong rebound in 2026, it heavily depends on the following three key outcomes, with at least one needing to occur:

ETFs and Digital Asset Treasury (DAT) companies expand their investment scope beyond Bitcoin and Ethereum. Currently, US spot BTC/ETH ETFs concentrate liquidity heavily on a few large-cap tokens, leading to a narrowing market breadth and severe performance divergence. Only when more cryptocurrencies are included by institutions through ETFs or corporate treasuries can broader market participation and liquidity be restored.

Major assets like BTC, ETH, BNB, and SOL show strong performance again, generating widespread wealth effects. In 2025, the traditional cycle of "BTC rising followed by capital flowing to alts" largely broke down. The average altcoin uptrend lasted only about 20 days (compared to about 60 days the previous year), with most tokens trending lower due to unlocking sell pressure. Only if leading assets surge again can capital potentially trickle down, reactivating the altcoin market.

Retail investor attention returns to the crypto market. Retail investors are still actively participating in the market, but funds are primarily flowing into high-growth themes like dollar-cost averaging into the S&P 500, AI, robotics, and quantum computing. The painful memories from 2022-2023 (sharp declines, bankruptcies, liquidations), combined with crypto's underperformance relative to traditional stock markets in 2025, have significantly diminished the appeal of crypto's "get-rich-quick" allure for many. Only with a large-scale return of retail investors will the market regain its frenetic momentum. (Cointelegraph)