Wintermute said inflows across stablecoins, ETFs and digital asset treasuries have plateaued, leaving crypto liquidity recycling internally.
Crypto market-maker Wintermute said the digital asset market’s current cycle is being driven by “recycled liquidity,” as inflows from its three primary funding sources have slowed.
In a Wednesday blog post, Wintermute argued that liquidity remains the defining force behind every crypto cycle. The market maker said that while blockchain continues to be adopted, the flow of fresh capital has decelerated in recent months.
The company pointed to stablecoins, exchange-traded funds (ETFs) and digital asset treasuries (DATs) as the three major conduits for crypto liquidity, warning that liquidity inflow in all three has reached a plateau.
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