Wall Street's Crypto Grip Tightens as Institutional Investors Dominate Trading Volumes

Wall Street's influence over crypto is growing as hedge funds and asset managers replace retail traders as key market forces. Institutional investors accounted for 72% of spot trading by volume on Wintermute’s OTC desk in the first half of 2026, up from 59% a year earlier.

This shift underscores how Wall Street is becoming the primary source of liquidity for crypto markets, dampening volatility along the way. While retail speculation and momentum trading were once dominant in crypto, professional traders are now setting the tone.

Derivatives, structured products, and exchange-traded funds (ETFs) are increasingly being used by institutions to gain exposure to cryptocurrencies like Bitcoin and Ether. In fact, altcoin options volumes on Wintermute’s OTC desk more than tripled from the second half of last year, but liquidity was concentrated in a smaller group of tokens.

However, institutions have proven choosier than retail investors, prioritizing more liquid assets. The variety of tokens traded by professional counterparties grew 24% in the last two years, compared to 76% among retail investors.