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

2026-01-14 05:46

According to Odaily, crypto 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 nearly 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 relies 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 potentially 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 funds flowing to altcoins" largely broke down. The average uptrend cycle for altcoins was only about 20 days (compared to about 60 days the previous year), with most tokens trending lower due to unlock selling pressure. Only if leading assets surge again can funds 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 mainly flowing into high-growth themes like S&P 500 index funds, AI, robotics, and quantum computing. The painful memories from 2022-2023 (sharp declines, bankruptcies, liquidations), combined with crypto's underperformance compared to traditional stock markets in 2025, have significantly diminished the "get-rich-quick" appeal of crypto for many. Only with a large-scale return of retail investors will the market regain its frenetic momentum. (Cointelegraph)