- Crypto markets are showing renewed liquidity strain as U.S. spot Ethereum ETFs record sustained outflows.
- Wintermute analyst Jasper De Maere says the market has entered a “self-funded” phase.
- Without fresh growth in ETFs, stablecoins, or digital asset treasuries, crypto markets will likely remain range-bound and volatile.
The crypto market is showing fresh signs of liquidity strain as U.S. spot Ethereum ETFs record sustained outflows while growth in stablecoin issuance slows sharply.
The trend underscores what Wintermute analyst Jasper De Maere describes as a shift into a “self-funded” phase, a period where market activity relies heavily on existing capital rather than new inflows.
Related: Why Is Crypto Down? Data Shows Bitcoin Tracking US Liquidity Drain
De Maere’s analysis indicates that despite strong global liquidity conditions, investors are increasingly favoring traditional assets such as U.S. Treasuries due to higher yields on the Secured Overnight Financing Rate (SOFR). This shift has reduced the flow of funds into crypto markets, limiting external growth.
Growth in Key Inflow Channels Slows
Data shows that since early 2024, the combined value of ETFs and DATs has risen from $40 billion to $270 billion. Meanwhile, the supply of stablecoins nearly doubled from $140 billion to $290 billion. However, both categories are now showing clear signs of stagnation.
The slowdown suggests that new capital entering the market has weakened, forcing the industry to rely on existing liquidity. The analyst says this internal recycling of funds has resulted in short-lived rallies and higher volatility across major crypto assets such as Bitcoin and Ethereum.
Recent data added more context. Spot ETH ETFs have posted six consecutive days of net outflows. On November 5, total withdrawals reached $118.5 million, with BlackRock’s fund leading the movement.
Despite the broader trend, some funds continued to attract capital. Grayscale’s Mini ETH logged $24.06 million in inflows, and Fidelity’s FETH added $3.45 million. This partially offsets the heavy redemptions seen in BlackRock’s product.
The mixed performance suggests that while some institutions are rotating out of large-cap ETFs, others remain confident in smaller, more flexible products.
Stablecoin Growth Loses Momentum
Stablecoin expansion is slowing after rapid gains earlier this year. Total supply, which nearly doubled from $140 billion to $290 billion, has now plateaued. Weekly issuance has dropped to about $1.1 billion, well below 2024’s boom levels.
The slowdown suggests one of crypto’s key funding channels is fading. As many stablecoins are backed by short-term U.S. Treasuries, higher traditional yields are drawing capital away from digital assets.
With fewer new stablecoins entering circulation, liquidity is thinning, contributing to shorter and more volatile market swings..
Analyst Warns of “Self-Funded” Market Phase
Ultimately, De Maere notes that slowing ETF inflows, flat stablecoin supply, and reduced digital asset treasury activity have pushed crypto into a closed liquidity loop. Traders are now recycling existing capital rather than attracting new inflows, fueling short rallies that quickly fade.
Related: U.S. Shutdown Stalls 90 Crypto ETF Approvals in October, Freezes $10 Billion in Inflows
Without renewed growth in stablecoin issuance, ETF creation, or treasury funding, markets will stay constrained. A rebound in any of these channels could reignite liquidity and signal the start of a new expansion cycle.
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