Institutional investors take over crypto trading
During the first half of 2026, institutional investors made up a record 72% of spot trading volume on Wintermute's over-the-counter desk. This is a significant jump from around 61% in the second half of 2025, showing a clear shift in how crypto markets are being shaped.
Wintermute’s latest report highlights that institutional capital is helping to reduce market volatility and is concentrating liquidity in a smaller selection of cryptocurrencies. This shift indicates that professional investors are now playing a bigger role in crypto trading than retail traders, signaling a milestone in the development of digital assets.
Institutional investors tend to focus on long-term strategies and operate within clearly defined risk thresholds. This approach contrasts with the more speculative nature of retail trading and results in a market where volatility is lower, and liquidity is increasingly tied to a few key tokens.
Concentration of trading activity and its effects
The report notes that institutional investors are trading a relatively small number of tokens, whereas retail traders still distribute their activities across a broad range of assets. This trend is making altcoin rallies more selective, as capital is no longer flowing into a wide array of projects but is instead concentrated in fewer assets.
As a result, the direction of the market is increasingly determined by a smaller group of assets that are traded more carefully. Instead of seeing broad-based rallies where most alternative cryptocurrencies rise in unison, the market is seeing more focused growth in specific tokens. Institutional capital is driving these developments by focusing on a limited set of assets.
Rise of crypto derivatives and tokenization
Wintermute’s report highlights the growing use of derivatives as a key trend. For example, the notional trading volume in altcoin options on its OTC desk rose by nearly 3.4 times compared to the second half of 2025. This surge is largely driven by investors looking for yield rather than direct price exposure.
Alongside this, contracts for difference (CFDs) are being utilized across a broader range of cryptocurrencies for various purposes, including directional trading, hedging strategies, and basket investments. These financial tools are becoming increasingly important in the institutional crypto space.
Tokenized real-world assets are also gaining traction. The total value of these assets increased by almost 50% to $31 billion in the first six months of 2026. This rise is accompanied by a significant increase in the average monthly transfer volume, which more than doubled to $9 billion. While professional investors are gravitating toward tokenized Treasuries, money market funds, and private credit, retail traders remain more engaged in tokenized equities.
Despite the growing influence of institutions, Wintermute anticipates that retail participation will return with the next bull market. However, the firm argues that the dominant role of institutional investors is unlikely to wane. Instead, the overall market is starting to mirror the behaviors and preferences of its largest players, especially in terms of liquidity, pricing dynamics, and the types of assets attracting capital.
The report also emphasizes that the market structure is becoming clearer with fewer distractions from retail-driven price swings. As the crypto sector matures, it is adopting many of the characteristics of traditional financial markets, where professional investors shape the landscape.
Realized volatility is also on the decline, dropping from approximately 70% in past market cycles to around 45% in the current one. This reduced volatility reflects the maturing nature of the asset class and the stabilizing influence of institutional capital.
In conclusion, the report underscores how institutional dominance is transforming crypto trading dynamics, making the market more predictable, and steering it toward a more mature financial environment.