Last year’s October cryptocurrency crash fundamentally changed the behavior of small investors. According to a new report by Wintermute, after massive liquidations, retail investors withdrew from riskier altcoins and returned to Bitcoin and Ethereum, which significantly influenced the shape of the market in 2025.
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October as a turning point: retail investors shift capital back to BTC and ETH after the shock
The Digital asset OTC market 2025 report identifies October 10 as a clear turning point. That was when record liquidations of leveraged positions and a sharp drop in prices disrupted previous investment patterns. While since 2022, retail investors had been selling BTC and ETH and shifting capital to altcoins, this trend reversed after the October shock. Investors began to seek out assets with higher liquidity and lower perceived risk.
Wintermute describes this reversal as a defensive reaction to fears of a domino effect and an impending bear market. After a brief period of widespread exposure reduction, retail investors quickly returned to the major cryptocurrencies. By the end of the year, their behavior began to closely resemble that of institutional investors, who also prefer stability over marginal risk.
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Weak altcoin season and return of confidence: the market is growing, but questions remain
The return of capital to the “majors” had a major impact on altcoins. A full-fledged altcoin season did not materialize in 2025, and most growth stories lacked longer-term momentum. The average altcoin rally lasted about 19 days, compared to 45 to 60 days in previous years. Narratives emerged but quickly faded, which, according to Wintermute, points to lower investor conviction and market fatigue.
Although altcoins have not yet found stronger momentum, the fear associated with October’s crash is gradually fading. The total market capitalization of cryptocurrencies has grown by approximately 10% since the beginning of the year to $3.34 trillion, and according to Bitwise, investors are leaving the crisis-ridden October behind. However, whether the return to Bitcoin and Ethereum was just a temporary reaction to an extreme event or the beginning of a longer-term change in retail behavior remains an open question.
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