Capital flows indicate that stocks and cryptocurrencies are becoming "risk-reducing interchangeable assets." This was stated by analysts at Wintermute.

Source: X/Wintermute.

"By comparing our own data on crypto investors with JPMorgan's information on retail stock inflows, we gain a new perspective on the relationship between activity in the stock and cryptocurrency markets," the company noted.

Up until the end of 2024, both markets moved in sync: the positive sentiment from traditional players translated into purchases of digital assets. However, in 2025, this trend shifted — retail investors are now pouring money into stocks at a record pace while staying away from cryptocurrencies.

Analysts believe that the fluctuating correlation between retail activity and the market capitalization of altcoins confirms this shift. Investors are now allocating funds across segments rather than investing in both simultaneously.

Wintermute highlighted several key points that have shaped the current situation:

  • meme coins and AI agents "had their moment" — when activity in the stock market stalled, investors shifted their focus to these areas;
  • retail continued to actively buy stocks during downturns, such as during the announcement of U.S. tariffs in April 2025 and more recently;
  • after October 10, there was a near-complete shift to the stock market, which continues to this day.

Source: X/Wintermute.

"It's important to note: we do not consider retail investor activity in cryptocurrency to be high enough to divert attention from stocks. We are saying that increased engagement in the stock market is crowding out cryptocurrency," the experts clarified.

According to analysts, retail activity in traditional products is a new factor that crypto investors should closely monitor to identify favorable moments for more sustainable demand for digital assets.

Market Maturation

The growing presence of experienced investors, along with new liquidity tools like ETFs and DATs, has mitigated the "reflexive volatility spikes" characteristic of previous cycles.

However, with the total market capitalization of the crypto market at $2.3 trillion, a much larger influx of capital is required for positive movement compared to five years ago, Wintermute noted.

"As volatility decreases, the key advantage of cryptocurrencies for investors also weakens. The extreme fluctuations that defined the 2021-2022 cycle and attracted a whole generation of new participants have simply vanished in their usual form. For retail investors seeking volatility, stocks are becoming increasingly attractive," the analysts added.

While cryptocurrencies still play a significant role in portfolios, digital assets have now become just one of many tools rather than the primary product for speculation, the company concluded.

As a reminder, River reported a record increase in Bitcoin adoption by institutional banks, public companies, and governments.