Investment Strategies Diverge 30% Between Institutions and Retail in 2025

During the first half of 2025, a notable divergence in investment strategies between retail investors and institutional investors emerged, according to a report by Wintermute. This shift marks a departure from the synchronized trading interests observed in previous years, as institutions focus on major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), while retail investors gravitate towards memecoins and other alternative coins.

The disparity in major cryptocurrency allocations between institutions and retail traders has reached a record 30 percentage points. Institutions maintain a 67% allocation to major cryptocurrencies, primarily through ETF inflows and other accumulation vehicles. In contrast, retail investors have reduced their allocation to majors by 9%, now standing at 37%, as they pivot towards altcoins. This trend indicates a more mature and specialized crypto market, where investors are pursuing different strategies based on their risk appetites and investment goals.

Evgeny Gaevoy, CEO and Founder of Wintermute, commented on this divergence, stating, "This divergence isn’t a temporary thing; it’s the sign that we are experiencing a more mature, sophisticated and specialized crypto market. Investors are no longer chasing the same trend. Institutions are treating crypto as a macro asset, while retail traders continue to gravitate to innovation."

Institutions have increasingly adopted derivatives in the first half of 2025 as tools for hedging, yield generation, and capital-efficient exposure. Wintermute's report highlights a 412% surge in over-the-counter (OTC) options volume compared to the same period in 2024, underscoring the growing institutional interest in these financial instruments.

Meanwhile, retail investors have shown a keen interest in memecoins, with newer coins like BONK, WIF, and POPCAT gaining traction. More established memecoins such as DOGE and SHIB have seen a slight decline in dominance. However, DOGE, SHIB, and PEPE remain the top three memecoins by weight in the GMCI MEME Index, reflecting their enduring popularity among retail investors.

Looking ahead to the second half of 2025, Wintermute notes that the potential decision on spot Dogecoin ETFs by the Securities and Exchange Commission in October could significantly influence retail demand. Several firms have filed for spot Dogecoin ETFs this year, indicating a growing institutional interest in this particular memecoin.

This bifurcation in the crypto market reflects a broader trend of institutional investors seeking stable, long-term exposure to major cryptocurrencies, while retail investors continue to explore newer, riskier opportunities. As the crypto market matures, this divergence is likely to persist, with each segment pursuing strategies aligned with their respective investment objectives.