Crypto's next altcoin season may produce fewer winners as institutional investors concentrate their activity in a narrower group of digital assets, according to crypto market maker Wintermute.

In its over-the-counter (OTC) flow report for the first half of 2026, Wintermute said institutional counterparties generated 72% of spot flow across all tokens on its OTC desk — the highest share on record. That figure was up from 61% in the second half of 2025 and 59% in the first half of last year. The trend coincides with the broader maturation of crypto's institutional infrastructure following the approval of spot Bitcoin and Ether exchange-traded funds in the United States, which channeled traditional capital into a handful of large-cap assets through regulated vehicles.

With institutional activity concentrated in fewer tokens and fading faster after price surges, the findings suggest that future altcoin rallies could become narrower and more selective. Wintermute said liquidity is concentrating in the assets institutions favor, while activity across the market's "long tail" of smaller tokens continues to weaken.

Between the first half of 2024 and the first half of 2026, the number of unique tokens traded by Wintermute's institutional counterparties grew by just 24%, compared with 76% growth among retail clients over the same period. The firm also found that institutional activity following a surge in a token's price and volume typically faded after roughly one day, whereas retail activity remained elevated for about three days.

Altcoin Capital Already Becoming More Concentrated

Wintermute's findings add proprietary OTC data to broader signs that capital has been clustering around a smaller group of altcoins across the wider market. The proliferation of new tokens — with tens of thousands now listed across major and minor exchanges — has further stretched available liquidity, making it harder for smaller assets to sustain investor attention even during favorable market conditions.

On June 20, CryptoQuant CEO Ki Young Ju said the traditional rotation of Bitcoin profits into smaller crypto assets had "basically disappeared". CryptoQuant data showed trading volume in Bitcoin-denominated altcoin pairs near its weakest level since 2021.

Meanwhile, the 10 largest non-stablecoin altcoins accounted for approximately 80.5% of the non-Bitcoin, non-stablecoin market's capitalization.

Kaiko identified a similar concentration in exchange trading. In July 2025, the data provider said that the 10 largest altcoins accounted for 63% of altcoin trading volume, up from about 50% several months earlier, as activity in smaller tokens weakened.

DWF Labs managing partner Andrei Grachev also argued that broad altcoin rallies were giving way to selective sector moves. On March 15, Grachev said too many tokens were competing for limited capital, while institutional investors remained focused on Bitcoin, Ether, and tokenized real-world assets.

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