Wall Street Increases Presence in Crypto, but Altcoin Capital Flows Become More Concentrated

Data from Wintermute shows that institutions are increasingly dominating OTC crypto activities, but capital flows are concentrating on a narrower group of assets. This could make future altcoin rallies more selective rather than widespread across the market.

Institutions Increase Presence but Trade Fewer Tokens

In the 2025-2026 period, traditional financial institutions continue to expand their blockchain applications.

JPMorgan has put JPM Coin (JPMD), a token representing USD deposits, into use for institutional clients on Base -- Ethereum's Layer 2 network. Meanwhile, State Street Investment Management and Galaxy launched the tokenized liquidity fund SWEEP on Solana in May 2026.

However, institutional capital is not evenly distributed across the crypto market.

According to Wintermute, institutional clients accounted for a record 72% of spot flow on the OTC desk in the first half of 2026. Nevertheless, the number of tokens traded by this group only increased by 24% compared to the first half of 2024, while the retail group saw a 76% increase.

This indicates that institutional capital is trending towards certain assets and themes, rather than spreading across the entire altcoin market.

Crypto Exchanges Shift to Multi-Asset Models

The change in liquidity is also affecting the strategies of trading platforms.

Bitget CEO Gracy Chen believes that crypto liquidity has not significantly recovered in nearly a year, and pure crypto platforms are facing pressure to expand into other asset groups.

According to data released by Bitget, non-crypto assets at one point accounted for about 20%-40% of trading volume on the platform in Q1 2026.

Bitget also announced the Project Archimedes program worth $300 million for certain quantitative trading firms, asset managers, and market makers. However, this program is specifically for institutions meeting certain criteria, not a general credit limit for users.

Where is Institutional Capital Concentrating?

Current data shows that Wall Street's deeper entry into blockchain does not mean a simultaneous rally of altcoins will occur.

Instead, institutions are increasingly interested in certain areas such as Bitcoin, blockchain payment infrastructure, tokenized assets, stablecoins, and on-chain financial applications.

Wintermute also notes that liquidity is concentrating on assets that institutions are interested in, while the "long tail" of the market is becoming thinner.

This could lead to a market structure different from previous cycles: institutional capital is still increasing, but the number of benefiting assets may be fewer.

For exchanges, competition thus lies not only in the number of listed tokens but also in liquidity, risk management, transparency, and the ability to meet regulatory requirements in each market.

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