**Why Crypto Markets Are Not Bouncing Back Despite Favorable Macroeconomic Conditions: Insights from Wintermute**
Global liquidity is rising, stocks are soaring, and interest rates are falling — yet the cryptocurrency market continues to underperform. According to Wintermute’s latest market update dated November 3, despite a supportive macroeconomic environment, capital is not flowing into crypto markets at the same pace as other risk assets.
### Expanding Liquidity but Limited Crypto Inflows
The report highlights that global liquidity is expanding as central banks cut interest rates and wind down quantitative tightening (QT). Stock markets are sitting near all-time highs, reflecting overall positive financial conditions. However, this improvement has not translated into substantial inflows into the crypto space.
Wintermute attributes this underperformance to a redirection of liquidity. While inflows are primarily targeting equities, particularly sectors like artificial intelligence (AI) and prediction markets, crypto-specific channels have largely stalled.
### Slowdown in Key Crypto Growth Drivers
Earlier in the year, ETF inflows and Digital Asset Treasury (DAT) activities were significant drivers of crypto growth. Today, both have significantly slowed. The report notes: “The tap isn’t off, it’s just pointed somewhere else.”
The only crypto-related metric still showing growth is stablecoin supply, which has increased by over $100 billion year-to-date. In contrast, Bitcoin ETF assets under management have stagnated near $150 billion, and secondary DAT volumes have plummeted.
### Market Performance Reflects the Trends
Market data echoes this slowdown. Bitcoin (BTC) and Ethereum (ETH) have remained range-bound, with Bitcoin trading near $101,000 and Ethereum around $3,300. Meanwhile, the broader crypto market has recently experienced heavy losses, with gaming tokens, layer-2 solutions, and meme coins suffering double-digit declines over the past week.
### Wintermute Declares the Four-Year Bitcoin Cycle “Dead”
Wintermute challenges the traditional four-year Bitcoin cycle theory, arguing that it no longer holds relevance. The firm contends that in mature markets like crypto, price movements are now driven primarily by liquidity flows rather than miner supply or halving events.
This represents a fundamental shift requiring investors to adjust expectations and place greater emphasis on monitoring macroeconomic conditions and institutional behaviors.
### Crypto Market Structure Remains Healthy
Despite the current stagnation, Wintermute emphasizes that the crypto market structure remains fundamentally healthy. Leverage has been significantly reduced, volatility is subdued, and market positioning is cleaner compared to earlier in the year.
The firm remains cautiously optimistic that renewed ETF or DAT inflows could trigger the next leg of the crypto recovery. However, for now, crypto remains the weakest performer among global risk assets.
### Outlook: Recovery Hinges on Capital Inflows
Bitcoin and Ethereum ETFs have recently seen a five-day outflow streak. Until capital starts flowing back into crypto-specific instruments, a robust recovery will likely remain elusive — even in an environment characterized by abundant liquidity.
—
**In summary, while macroeconomic conditions are favorable, capital redirection and stalled inflows have kept crypto markets subdued. Investors should monitor liquidity trends closely to identify signs of a potential turnaround in this evolving landscape.**
https://bitcoinethereumnews.com/crypto/crypto-recovery-remains-slow-despite-global-liquidity-boost-wintermute/