Altcoin Season May Be Different This Time, Wintermute Says Only a Few Tokens Could Lead

The next altcoin season could look very different from previous market cycles, according to crypto market maker Wintermute. Instead of capital spreading across hundreds of cryptocurrencies, the firm expects institutional investors to concentrate their money in a much smaller group of established projects. Data from Wintermute, CryptoQuant, and Kaiko points to the same trend, while several analysts remain divided on whether a broader altcoin rally is still possible.

Institutions Are Dominating Crypto Flows

Wintermute’s latest over-the-counter (OTC) report for the first half of 2026 showed that institutional investors accounted for 72% of spot OTC trading volume, the highest level on record.

That figure has steadily increased from:

• 59% in H1 2024
• 61% in H2 2025
• 72% in H1 2026

According to Wintermute, hedge funds, asset managers, investment funds, and family offices are driving most of the activity, while retail participation has yet to make a meaningful comeback.

Altcoin Season May Become More Selective

Wintermute said the biggest structural change this cycle is that liquidity is flowing into only a handful of large, liquid assets instead of the broader altcoin market.

The report found that between H1 2024 and H1 2026:

• Institutional investors increased the number of unique tokens traded by only 24%.
• Retail traders expanded their token exposure by 76%.

Institutions also tend to reduce trading activity one day after a sharp price rally, while retail investors usually remain active for around three days, showing that institutional capital rotates much faster.

Capital Is Already Concentrating

The report matches broader industry data.

CryptoQuant CEO Ki Young Ju recently said the traditional rotation of Bitcoin profits into smaller altcoins has “basically disappeared.” CryptoQuant also found that Bitcoin-denominated altcoin trading volume is sitting near its lowest level since 2021.

Meanwhile:

• The top 10 non-stablecoin altcoins now account for about 80.5% of the non-Bitcoin, non-stablecoin market capitalization.
• Kaiko reported the top 10 altcoins now generate 63% of total altcoin trading volume, compared with roughly 50% only a few months ago.

Wintermute added that liquidity continues to strengthen around institutionally favored assets while activity across smaller tokens keeps weakening.

Derivatives and RWAs Are Gaining Momentum

Wintermute also highlighted two other growing trends.

Altcoin OTC options volume has increased 3.4 times over the past six months as institutions increasingly use derivatives for hedging and yield generation rather than simply trading spot markets.

The report also noted that the tokenized real-world asset (RWA) market has grown nearly 50% to around $31 billion during H1 2026. Institutional demand remains strongest for tokenized U.S. Treasuries, money market funds, and private credit, while tokenized stocks continue attracting retail investors.

Analysts Still See Room for a Rally

Not everyone expects a narrow altcoin cycle.

Michaël van de Poppe said he expects the Ethereum ecosystem to outperform Bitcoin and believes ETH could target $2,300 if it breaks above $1,975. 

Daan Crypto Trades noted that the total altcoin market cap is still holding key support, while Crypto Patel pointed to a bullish MACD crossover on altcoin dominance, saying similar setups previously produced 10x to 20x rallies.

Javon Marks also said current market structure closely resembles previous altseason setups.

While analysts remain optimistic about a recovery, Wintermute’s report indicates that this cycle could reward only a limited number of high-quality, liquid projects rather than lifting the entire altcoin market.