Crypto Market Splits as Institutions Stick With BTC, ETH While Retail Chases Newer Alts, Says Wintermute

A distinct split is emerging in the crypto markets, as institutional and retail investors diverge in their strategies, according to a mid-year report from trading firm Wintermute.

Institutions are consolidating their positions in blue-chip assets like bitcoin (BTC) and Ethereum’s ether (ETH), while retail traders are flocking toward altcoins and newer memecoins such as BONK, POPCAT, and WIF, moving away from older favorites like dogecoin (DOGE) and shiba inu (SHIB).

Wintermute’s analysis of over-the-counter (OTC) spot trading reveals that institutional activity remains concentrated in BTC and ETH, which still account for 67% of trading volumes—likely driven by ETF inflows and structured investment products. Meanwhile, retail investors have reduced their allocation to BTC and ETH from 46% to 37%, shifting funds into more speculative tokens.

“This divergence isn’t just a passing trend,” said Evgeny Gaevoy, CEO and founder of Wintermute. “It reflects a maturing and increasingly specialized crypto market. Institutions now see crypto as part of macro investing, while retail investors continue to seek out innovation and new narratives.”

Traditional finance (TradFi) players were the fastest-growing segment in OTC volumes, climbing 32% year-over-year. That growth has been spurred by regulatory clarity from measures such as the U.S. GENIUS Act and Europe’s ongoing MiCA framework, which have encouraged more institutional participation.

Retail brokers also posted strong gains, with trading volumes rising 21% over the same period. In contrast, crypto-native firms scaled back slightly, with volumes down 5%.

The appetite for crypto derivatives has surged, Wintermute noted, with OTC options volumes soaring 412% compared to the first half of 2024. Contracts for Difference (CFDs) have also doubled in scope, providing traders with access to less liquid tokens in a more capital-efficient format.

Wintermute highlighted that its own OTC desk experienced spot trading volume growth at more than twice the pace of centralized exchanges, signaling a broader shift toward large, private transactions favored by institutional players.

Meanwhile, memecoin trading has grown more fragmented. Although overall retail activity in memecoins dipped, the number of different tokens traded by individual users doubled, revealing a growing appetite for micro-cap assets scattered across the long tail of the market.

Legacy memecoins like DOGE and SHIB have lost market share to a wave of newer niche tokens, including BONK, dogwifhat (WIF), and POPCAT, the report observed.

Looking ahead to the second half of 2025, Wintermute analysts advised monitoring developments around spot dogecoin ETFs, with a key regulatory decision expected by October.

“The outcome could have a significant impact on the retail market and potentially set the stage for other alternative assets to follow,” the report concluded.