Wintermute’s Ethereum OTC Desk Runs Dry – What’s Next for Institutional Buyers?
Wintermute just hit a liquidity wall. The crypto market maker’s Ethereum OTC reserves have officially tapped out, leaving institutional traders scrambling for alternatives.
The OTC Drought
No more over-the-counter ETH sales—at least not from one of the sector’s biggest players. Wintermute’s dry powder signals either surging demand or a strategic pivot (or, let’s be real, another ‘risk management’ excuse from a firm that probably underestimated gas fees again).
Market Ripple Effects
With Wintermute sidelined, expect tighter spreads on large ETH orders—and more desks stepping in to fill the void. Because nothing makes crypto traders happier than a little supply shock drama.
The Bottom Line
Institutional crypto still runs on scarcity theater. When the OTC well runs dry, someone’s always waiting to sell you a bottle of ‘market-making innovation’ at a 200% markup.
Wintermute depleted its ETH reserves after increased whale purchases, with almost no ETH available on its OTC desk. | Source: Arkham Intelligence.
Based on the fund’s public wallets, Wintermute holds around 8,155 ETH, down from 27K as of July 10. The available reserves are often replete with short-term purchases, but the fund has been keeping a relatively low balance. Wintermute has often depleted its holdings after a single whale purchase.
This time around, Wintermute’s low reserves coincide with FOMO buying, as ETH broke out to levels not seen since the late 2024 bull market. ETH is now closing in on the $4,000 target, last traded on December 8, 2024. The price recovery arrives after a period of whale capitulation for some buyers. Others, including ETF and anonymous whales, went through a period of silent accumulation.
ETH is becoming a scarce commodity
ETH remains slightly inflationary, and has added around 900K coins since the launch of ETH 2.0. On a weekly basis, the network adds a net 15,957 ETH, based on the difference between block reward production and fee burns.
The annual inflation settled at around 0.7%, gradually expanding the supply above 120,908,202 ETH.
Of that supply, close to 30% is staked, with a long-term holding outlook. Whales now rarely sell ETH on the open market, instead preferring lending protocols or liquid staking.
Even with a net inflation, ETH is becoming scarce even through ETF buying. BlackRock acquired 159,100 ETH, nearly absorbing more than two months’ worth of newly created tokens. This does not account for other whales, funds, corporate buyers, and general staking.
BlackRock now holds over 2M ETH, expanding the reserves to an all-time high with almost constant buying over the past month. The acquisition trend accelerated in July as ETH broke above key levels.
Galaxy Digital also sees ETH outflows
Galaxy Digital, another provider of OTC ETH services, also saw active outflows from its wallets. Some of the known Galaxy Digital addresses hold around 55,000 ETH, down from over 70K ETH in the past weeks.
The fund’s reserves were further depleted as a single whale placed $14M on ETH spot buying. OTC deals do not immediately show up as price action, but show whale movements and potential silent accumulation.
Some of the recent demand for corporate treasuries may also be filled through OTC deals. ETH still has multiple older whales, including ICO treasuries from previous cycles.
Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
