Wall Street Is deepening Its crypto grip and rewiring the market

Institutional investors accounted for 72% of spot trading by volume on Wintermute’s over-the-counter desk in the first half of 2026, up from 59% a year earlier, even as overall crypto volumes weakened, according to a recent report from the trading firm. The shift underscores how Wall Street is becoming the market’s primary source of liquidity, damping its trademark volatility along the way.

While crypto was built on retail speculation and momentum trading, the recent lull is a sign of how professional traders are now setting the tone.“These trends suggest crypto is entering a more institutionally driven market structure, with capital becoming increasingly concentrated, derivatives playing a larger role in expressing exposure, and tokenized assets beginning to see meaningful secondary market activity,” Wintermute analysts said in a report.

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Part of the shift is from institutions changing how they gain exposure. Rather than buying tokens outright, they are increasingly using derivatives, structured products and exchange-traded funds.

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It is not just happening for Bitcoin and Ether products. Altcoin options volumes on Wintermute’s OTC desk more than tripled from the second half of last year, but liquidity was more concentrated in a smaller group of tokens.

Still, institutions have proven choosier than retail as they prioritize more liquid assets. The variety of tokens traded by professional counterparties grew 24% in the last two years, according to Wintermute, compared with 76% among retail investors.“We’re actually seeing more due diligence from asset managers and wealth managers,” said Alistair Byas-Perry, head of capital markets and investment for Europe, the Middle East and Africa at 21shares AG.

All of this has resulted in one of crypto’s most atypical drawdowns to date. Bitcoin is down roughly 50% from its peak above $126,000 last October, but it has been a steady decline rather than the violent re-pricing that characterized previous crypto winters.

“Crypto is trading like any other asset class now,” said Stephen Coltman, head of macro at 21Shares.

While retail participation is subdued, some traders are undeterred. Adam Potamkin, a 30-year-old paramedic based in Miami, recited a mantra popularized by Strategy Inc. founder Michael Saylor, invoking the mysterious creator of Bitcoin: “Volatility is Satoshi’s gift to the faithful.”

Potamkin said his most recent Bitcoin purchase was just a few months ago, when it was much more expensive. The token was trading at around $63,800 on Tuesday, while its high in May was above $82,000.

“Has my conviction been tested? Absolutely,” he said. “The world feels shakier, and we’re still trying to figure out how to value this asset.”

Some investors believe the market may be nearing a bottom, though few will call it.

“You only know a market has bottomed in hindsight,” Coltman said. “The conditions are there that suggest we could be bottoming, but you don’t know what the future holds.”