Wintermute Report: Crypto Market Recovery Depends on ETF and DAT Inflows as Liquidity Flows to AI and Stocks

Key Takeaways:Wintermute reports that despite global liquidity growth and rate cuts by major central banks, new funds are not flowing into crypto markets.Liquidity has instead shifted toward stocks, AI, and prediction markets, leaving digital assets lagging.The report says the traditional four-year cycle theory is outdated — liquidity flows now dictate price movements.Market conditions remain stable, but recovery depends on renewed inflows into crypto ETFs and DAT (Decentralized Asset Tokens).Funds Flowing Into Stocks and AI, Not CryptoAccording to a new Wintermute report, the crypto market has failed to capture new capital inflows even as global liquidity expands. Despite interest rate cuts and the end of quantitative tightening by several central banks, capital has largely migrated toward equities, AI-related sectors, and prediction markets, while digital assets have lagged behind.The report highlights that while stablecoin supply continues to grow steadily, it hasn’t yet translated into meaningful crypto asset price appreciation.Liquidity, Not Halving Cycles, Now Drives PricesWintermute argues that the long-held four-year cycle theory — traditionally tied to Bitcoin halving events — no longer explains market dynamics. Instead, liquidity conditions and macro-driven flows have become the primary catalysts for crypto price movements.“Liquidity is the new narrative driver,” the report notes, emphasizing that macro liquidity, ETF demand, and institutional adoption are more influential than cyclical mining supply reductions.Market Structure Remains HealthyDespite subdued performance, market structure remains solid, according to Wintermute.Leverage levels have been significantly reduced, volatility is contained, and institutional participation remains steady. However, for a sustainable recovery, ETF inflows and DAT participation must pick up — signaling renewed investor confidence and capital rotation back into digital assets.ETF and DAT Flows as Recovery CatalystsThe report concludes that the return of capital inflows into crypto ETFs — particularly in the U.S. and Asia — alongside greater activity in Decentralized Asset Tokens (DATs), will be critical for reigniting market momentum.Without those inflows, Wintermute warns, crypto assets may continue to underperform relative to traditional and AI-linked sectors.