Wintermute Sees Crypto Stuck in Macro Regime Shift
Wintermute says crypto is still trading like a high-beta growth asset, with Bitcoin stuck in a tight range and institutional conviction still weak after the recent liquidation cascade. In its February 23 market update, the firm argues the bigger story is not just crypto price action, but a broader macro “regime change” now driving risk assets.
The desk’s message is straightforward: near-term pressure remains, and the key question for crypto in 2026 is whether this new macro regime proves temporary or durable.
Macro is no longer reacting to short-term headlines
Wintermute says markets had been trading off short-term “micro” catalysts for months, including tariff headlines, Fed comments, and earnings reports. But that playbook is now breaking down, with investors increasingly treating the current backdrop as a structural shift rather than a normal cycle wobble.
According to the update, the Fed is no longer the dominant force it was earlier in the cycle. Wintermute argues the main drivers of asset prices have become slower-moving and harder to trade: persistent tariffs, real-time AI disruption across sectors, slowing growth, and sticky inflation.
In that setup, the firm says investors are starting to question the old assumption that policy support would quickly stabilize markets.
Two structural trades are now reshaping risk appetite
Wintermute frames the current market as being driven by two reinforcing themes: an AI repricing and deglobalisation.
On AI, the firm says U.S. FY25 earnings and new model releases have pushed investors to reassess disruption risk sector by sector. In its view, this is no longer a narrative trade. Software moats are being re-evaluated, growth multiples are compressing, and even hardware-side capex assumptions are being questioned.
On deglobalisation, Wintermute points to U.S. tariff policy as a structural signal, not a temporary shock. The update argues that supply chains remain fragmented, input costs stay elevated, and geopolitical settlement risk is now a lasting part of asset allocation decisions.
Its conclusion: both trends are pressuring the same part of the market — globally integrated, software-heavy growth names.
Crypto is trading like high-beta growth, not a hedge
Wintermute says that dynamic is spilling directly into digital assets. Bitcoin has failed to reclaim $70,000 on multiple attempts since the liquidation cascade two weeks ago and is now rangebound around $64,000–$67,000, with choppy price action and thin liquidity.
The firm also highlights weak spot participation and says leverage is filling the gap left by compressing spot volumes. In its read, that helps explain the unstable, low-conviction range.
Ethereum, meanwhile, fell below $1,900 during the week. Wintermute notes that level matters more psychologically than technically, and flags roughly $1,600 as the more important downside area to watch.
Derivatives and desk flow still point to defense, not conviction
Wintermute says institutional demand has not returned despite price stabilization, unlike what it saw in the previous $85,000–$95,000 BTC range. The firm points to derivatives positioning as evidence: basis at multi-month lows, put skew elevated and rising, and open interest declining since October.
Desk flow was skewed toward selling, according to the update. Wintermute did note a brief mid-week pickup in appetite from high-net-worth investors in selective altcoins, but says that confidence faded quickly as the second half of the week turned choppy again.
The takeaway from the desk is that marginal activity is still centered on protection rather than directional risk-taking.
Wintermute’s bigger question for 2026
Wintermute’s core view is that crypto is currently being sold alongside tech and momentum because it remains one of the market’s highest-beta growth exposures. The firm says ETF outflows support that near-term picture.
But it stops short of calling this a permanent paradigm shift. While the current mix of stagflation fears, deglobalisation, and Fed paralysis looks more structural than past growth scares, Wintermute says it is still too early to know how long this regime will last.
That “stickiness” question, in the firm’s view, may be the most important macro variable for crypto in 2026.
Why it matters for crypto
- Crypto is still trading like a risk-on growth asset, not a defensive macro hedge, in the current environment.
- Weak spot demand and low-conviction derivatives positioning suggest fragile market structure even when prices stabilize.
- If the macro rotation into commodities, value, and hard assets continues, crypto may stay under pressure near term.
- ETH’s drop below $1,900 and BTC’s repeated rejection near $70,000 show key psychological levels are still driving sentiment.
- Institutional participation remains a critical missing piece for any stronger recovery move.
What to watch next
- Whether BTC can reclaim and hold above $70,000 with stronger spot volumes, not just leverage-driven moves.
- ETH price behavior around the $1,600 area Wintermute flagged as the key level.
- Changes in basis, put skew, and open interest for signs of returning directional conviction.
- ETF flow trends, especially whether outflows slow or reverse.
- Whether macro rotation away from growth starts to ease or becomes more entrenched through 2026.