Wintermute OTC has highlighted a reality many investors still haven’t fully priced in: the traditional four-year crypto cycle isn’t delayed it’s broken.
This isn’t a temporary anomaly or a soft prediction. It’s a structural shift in how the crypto market now functions, with major implications for anyone positioning for 2026 and beyond.
For years, the market revolved around theBitcoin halving cycle. Every four years, $BTC mining rewards were cut in half, creating artificial scarcity that reliably fueled major bull runs. This pattern played out almost perfectly in 2012, 2016, and 2020.
But 2025 shattered the script.
Despite the April 2024 halving, the market failed to deliver the broad-based expansion seen in previous cycles. Instead, capital became heavily concentrated in a handful of large assets, while most altcoins were left behind. This signals that halving mechanics are no longer the dominant driver of market performance.
📊 Capital flow now matters more than cycles.
In 2025, liquidity flowed primarily into BTC, $ETH , and a few large-cap altcoins, rather than rotating across the wider market. One of the biggest reasons? The rapid rise of ETFs and Digital Asset Tools (DATs).
These products act as “walled gardens” for capital. They give institutions easy, regulated exposure to crypto without wallets, custody risks, or operational complexity but they only support high-liquidity, regulator-approved assets. That means most new money never reaches smaller projects.
In past cycles, Bitcoin rallies triggered a chain reaction: BTC ➝ ETH ➝ large alts ➝ small caps.
In 2025, that rotation has largely disappeared. Capital enters the market and stays locked at the top.
📉 Wintermute OTC data confirms the shift:
Altcoin rallies are shorter and rarer
Average rally duration dropped from ~60 days in 2024 to ~20 days in 2025
Capital diffusion across the market has collapsed
Bottom line:
Crypto is no longer moving in neat four-year waves. It’s moving in liquidity pockets, driven by regulation, institutional access, and where capital is allowed to flow.
For investors, adapting to this new structure isn’t optional it’s survival.
