Wintermute Report Highlights Growing Decoupling Between Bitcoin Weakness And Equity Market Momentum
In Brief
Wintermute notes crypto weakness as BTC falls to $72K while equities rally on AI earnings. ETF outflows deepen, inflation stays sticky, and markets diverge across asset classes.
Algorithmic trading firm and liquidity provider Wintermute released its latest market commentary, highlighting a divergence between digital assets and traditional equities. Bitcoin declined to approximately $72,000 while Ether fell below $2,000, both down more than 4% over the month. At the same time, the S&P 500 extended its gains, recording its ninth consecutive weekly advance, as crypto markets failed to participate in the broader risk rally.
Spot Bitcoin ETFs recorded approximately $1.4 billion in net outflows, marking the longest redemption streak since their launch. Strategy was also noted as contributing to selling pressure. In contrast, the token HYPE moved above $70, showing relative strength and decoupling from broader market weakness.
Inflation data for April showed headline PCE at 3.8%, with core PCE rising to 3.3%, indicating persistent underlying price pressures. Market commentary noted that inflation remains elevated, with core measures trending higher rather than easing.
In energy markets, Brent crude declined to around $91 per barrel, representing a drop of roughly 20% over the month, the largest monthly decrease since the Covid period. The move was attributed to improved geopolitical sentiment around Iran and expectations of a possible 60-day ceasefire extension. The yield on the 10-year U.S. Treasury eased to 4.45%. Lower oil prices are expected to reduce headline inflation in the coming months, although underlying inflation trends remain in focus.
Analysts noted that core inflation is the key variable for monetary policy expectations. Concerns persist that previous energy-driven inflation may have filtered into services and wages, keeping core inflation elevated even as headline figures moderate. Market pricing for potential Federal Reserve rate hikes briefly rose above 50% following recent inflation data, before easing to around 35–40% as oil prices declined, although expectations of tighter policy have not fully disappeared. Bond markets continue to reflect inflation risk rather than clear disinflation, with renewed discussion of stagflation or a possible secondary inflation wave later in the year.
Equity markets continued to outperform, with gains broadening beyond semiconductors into software and enterprise technology. Companies such as Dell, Snowflake, IBM, and Salesforce reported results tied to artificial intelligence demand. The S&P 500 rose 1.9% for the week, marking its ninth straight weekly gain, while the Nasdaq advanced 8% over the month. The rally has been attributed less to macroeconomic improvement and more to sustained earnings momentum driven by AI-related capital expenditure, with equities largely overlooking the broader macro environment.
Crypto Markets Lag Amid Diverging Risk Appetite and Weak ETF Flows
In contrast, digital asset markets showed relative weakness. Bitcoin closed near $73,500 and Ether around $2,000, with major cryptocurrencies down more than 4% over the month while select altcoins posted marginal gains. This marked a second consecutive week of underperformance versus equities, indicating a continued divergence between asset classes. Risk appetite appeared concentrated in equities such as the Nasdaq and Russell 2000, while crypto lagged despite its historical sensitivity to macro cycles.
ETF flow data reinforced this trend, with Bitcoin and Ether funds experiencing combined outflows of roughly $2 billion over recent weeks. Earlier inflows that supported Bitcoin’s rise from $70,000 to $80,000 in April have reversed, and additional selling pressure was observed from Strategy, further weakening sentiment. The absence of consistent institutional inflows has been identified as a key factor behind subdued price action.
Despite near-term weakness, longer-term positioning has shown early signs of accumulation, with some market participants gradually increasing exposure through over-the-counter channels, viewing current levels as more attractive on a longer-term horizon. However, conviction around a near-term market bottom remains limited.
Among altcoins, HYPE emerged as a standout performer, surpassing $70 and attracting increased attention following developments including institutional interest and ETF-related structuring discussions. Its relative strength contrasted with broader market softness, with performance concentrated in select sectors such as privacy-focused tokens, AI-linked assets, and perpetual trading platforms. The pattern suggests a shift toward application-driven narratives rather than infrastructure-focused assets that dominated previous cycles.
Overall, market commentary highlighted a widening gap between equities and crypto, with AI-driven earnings supporting continued equity strength while digital assets remain constrained by weaker flow dynamics and a lack of clear marginal buyers. Near-term focus remains on inflation releases and upcoming macro catalysts, alongside ETF flow direction, which continues to play a central role in determining crypto market direction.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
