Wintermute research shows Bitcoin bear market drawdowns are shrinking due to increased institutional ETF participation, suggesting market maturation.
Macro & Markets ·
Bitcoin's current bear market drawdown has been notably shallower than cycles in 2018 and 2022, according to Wintermute. Approximately 50% below its peak 340 days after the top, Bitcoin's decline contrasts with losses exceeding 75% at the same stage in prior cycles. The trading firm attributes this pattern to expanding participation from exchange-traded funds and institutional investors, arguing that each successive cycle has bottomed at progressively smaller drawdowns—moving from 83% to 77% to the current 50%.
The structural shift extends beyond drawdown severity. Recovery timelines have also compressed: previous bear markets required more than 500 days to reach levels Bitcoin has already reached in the current cycle. Wintermute notes improved market breadth, with capital rotating between investor groups in ways resembling early-cycle dynamics, though the firm stops short of declaring a final market bottom.
Recent inflow data underscore ongoing institutional demand. Despite outflows of $46 million from Bitcoin ETFs in a single day, the products recorded nearly $987 million in inflows over the prior week, marking the third consecutive positive week and bringing cumulative inflows over that period to more than $3.8 billion. Bitcoin has traded around $79,000 to $82,400 over the period, resilient even after a sharper-than-expected employment report.