The crypto market is experiencing a notable divergence in investment strategies, with institutions focusing heavily on Bitcoin (BTC) and Ethereum (ETH), while retail investors increasingly chase after alternative cryptocurrencies and memecoins. This split was highlighted in a mid-year report released by Wintermute, a prominent crypto trading firm, which provides insights into the shifting dynamics within the digital asset landscape.
Institutional Anchors and Retail Wanderlust
According to the report, institutional trading activity in over-the-counter (OTC) spot markets remained robust, with Bitcoin and Ethereum accounting for 67% of the trading volume. This stability is attributed to the inflow of capital through exchange-traded funds (ETFs) and other structured investment vehicles. “This divergence isn’t a temporary thing; it’s the sign that we are experiencing a more mature, sophisticated, and specialized crypto market,” stated Evgeny Gaevoy, CEO and founder of Wintermute. Institutions are solidifying their positions, treating crypto as a macro asset. Meanwhile, retail investors have reduced their BTC and ETH exposure from 46% to 37%, redirecting their focus toward more speculative tokens. This follows a pattern of institutional adoption, which we detailed in our analysis of Bitcoin, Ether ETFs clocking second-biggest day of inflows on record.
The growth in institutional interest is being fueled by regulatory developments, such as the U.S. GENIUS Act and the European Union’s ongoing MiCA rollout. These frameworks have provided larger firms with the confidence to engage more deeply in the crypto space. Notably, traditional finance (TradFi) firms emerged as the fastest-growing participants in OTC trading, recording a 32% year-over-year increase in volume, the report noted.
Retail’s Love Affair with Altcoins
On the retail front, there has been a 21% rise in broker activity, despite a decline in crypto-native firm participation, which fell by 5%. Wintermute observed a significant jump in OTC options volume—up 412% compared to the first half of 2024—as institutions turned to derivatives for hedging and generating yield. Contracts for Difference (CFDs) also saw a surge, doubling in variety to provide access to less liquid tokens in a more capital-efficient manner.
Wintermute’s report also highlighted a shift in retail trading behavior concerning memecoins. Although overall trading in memecoins decreased, the variety of tokens traded by individual investors has doubled. This indicates a growing appetite for micro-cap assets, signaling a broadening of interest beyond legacy names like Dogecoin (DOGE) and Shiba Inu (SHIB). Emerging niche tokens such as Bonk (BONK), Dogwifhat (WIF), and Popcat (POPCAT) are gaining traction among retail investors seeking novel opportunities.
Looking Ahead: The Dogecoin ETF Decision
As the second half of 2025 unfolds, analysts at Wintermute suggest keeping a close eye on regulatory developments, particularly the spot Dogecoin ETF filings. A final decision is anticipated by October, which could have profound implications for the retail market and potentially set a precedent for other alternative assets. “The outcome could significantly impact the retail market and set a precedent for other alternative assets,” the report noted, hinting at the potential ripple effects in the broader crypto ecosystem. This is reminiscent of recent trends where Bitcoin, Ether, Solana, XRP ETFs saw record AUM, highlighting the growing institutional interest in structured crypto products.
While the bifurcation of the crypto market into institutional and retail paths raises questions about the sustainability of these trends, it undeniably underscores the dynamic and evolving nature of the digital asset space. As regulations continue to shape the landscape and new tokens capture the imagination of retail investors, the interplay between institutional stability and retail innovation will remain a compelling narrative to watch.
Source
This article is based on: Crypto Markets Bifurcate With Institutions Focusing on BTC and ETH While Retail Chases Alts: Wintermute
Further Reading
Deepen your understanding with these related articles:
- Trump Media Files for ‘Crypto Blue Chip’ ETF Holding Bitcoin, Ethereum, Solana and XRP
- Why Are Bitcoin, Ethereum and Solana Prices Still Rangebound? Experts Weigh In
- Ethereum Surge Sparks Altcoin Rotation: Here Are Analysts’ Top Picks
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
