Liquidity in crypto markets is circulating internally as inflows from ETFs, treasuries, and stablecoins stall, leaving traders battling in a self-funded cycle.
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Posted November 7, 2025 at 9:44 am EST.
Market maker Wintermute stated that the crypto market’s current cycle is driven by recycled liquidity as inflows from three primary funding sources have slowed. The firm identified stablecoins, exchange-traded funds and digital asset treasuries as major liquidity conduits that have all reached a plateau.
Data shows that ETF and digital asset treasury assets rose from $40 billion to $270 billion since 2024, while stablecoin issuance doubled to approximately $290 billion. However, momentum has faded, leaving the market in a self-funded phase where capital moves between cryptocurrencies without fresh inflows entering the ecosystem.
This story is an excerpt from the Unchained Daily newsletter.
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Wintermute noted that aggregate money supply remained supportive and central banks started easing after two years of tightening. The firm pointed to high short-term rates and elevated Secured Overnight Financing Rate leading investors to park cash in US Treasury bills rather than crypto assets.
This creates a player-versus-player market where rallies are short-lived and volatility is driven by liquidation cascades instead of sustained buying pressure. Wintermute suggested that revival in stablecoin minting, new ETFs or increased digital asset treasury issuance could trigger the next liquidity wave.
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