Institutional investors now account for 72% of Wintermute’s spot OTC crypto flow in the first half of 2026, up from 59% a year earlier, according to the firm’s latest report. This shift is concentrating liquidity into fewer tokens and dampening price volatility, with Bitcoin’s realized volatility falling from near 70% in 2025 to about 45% now. Professional traders are increasingly utilizing derivatives, with altcoin options notional volume growing 3.4 times since late 2025. The changing market structure marks a departure from past crypto winters, potentially reducing the extreme swings historically associated with retail trading.
Institutional investors are reshaping cryptocurrency markets, according to Wintermute’s 1H26 OTC report. The firm found that institutional counterparties—including hedge funds, digital asset treasuries, asset managers, and family offices—accounted for 72% of spot flow on its desk between January and June. This figure rose from 61% in the second half of 2025 and 59% in the first half of 2025.
The company stated that institutions are now the clear drivers of its OTC flow, adding that their trading habits are changing how liquidity is distributed across crypto. One major shift involves a focus on a smaller group of tokens. Between the first half of 2024 and the first half of 2026, the number of unique tokens traded by institutions increased by just 24%, while among retail traders, that number expanded 76%.
This dynamic has created a market where liquidity is increasingly concentrated in fewer assets. Institutional investors have also moved more exposure into derivatives, with altcoin options notional volume on Wintermute’s desk growing 3.4 times between the second half of 2025 and the first half of 2026. Investors are using these options strategies to generate yield.
The report linked institutional participation to lower volatility, noting Bitcoin’s realized volatility has dropped from near 70% in 2025 to about 45% now. Wintermute CEO Evgeny Gaevoy told Bloomberg Crypto that institutions are changing the way crypto behaves as they become a larger part of trading activity. The firm wrote, “As the patient cohort grows, it is draining crypto of the volatility that once made the asset class so compelling to retail.”
While Bitcoin has dropped roughly 49% from its October peak above $126,000, the decline has been relatively steady, with fewer sudden price plunges. Bitcoin was trading near $65,000 at the time of writing, barely moving in 24 hours and up just 1% across seven days. The findings align with broader bank infrastructure builds, including Morgan Stanley introducing crypto trading on its E*Trade platform and launching low-cost ETH and SOL ETFs.
