The crypto market has been struggling to keep up with traditional stocks since April, with most major cryptocurrencies showing little to no growth. Bitcoin, the largest digital asset, has dropped more than 15% over the last month, even though the U.S. Federal Reserve recently cut interest rates and announced it would stop quantitative tightening by the end of the year — both typically seen as positive moves for risky assets like crypto.

In contrast, the S&P 500 stock index has gone up 1.66% in the past month and is now up nearly 17% for the year. Meanwhile, Bitcoin is only up about 4.2% year-to-date, despite being a much smaller market (around $2.1 trillion in value) compared to the massive $60+ trillion S&P 500.

A new market report from Wintermute, a major player in crypto trading and liquidity, shows that while global liquidity is growing, that money isn’t making its way into cryptocurrencies. The M2 Money Supply — a key measure of how much money is flowing through the economy — has increased by over $2 trillion since June 2023, reaching more than $22 trillion by September 2025.

However, that extra liquidity hasn’t helped crypto investments. Crypto ETFs have seen little to no new money coming in, and activity from institutional investors using digital asset treasuries (DATs) for major coins like Bitcoin, Ethereum, Solana, and Binance Coin (BNB) has dropped off significantly.

Wintermute points out that while the crypto market appears structurally healthy — meaning it’s not overly leveraged and investor positions are relatively stable — what’s missing is fresh capital flowing into ETFs or DATs. Without that inflow, it’s hard for crypto prices to catch up with other asset classes.

Last week’s events brought a lot of volatility. The Fed’s rate cut, along with FOMC meeting notes and earnings reports from big tech companies, caused a sharp market reaction. While stocks quickly recovered after the sell-off, cryptocurrencies did not. The crypto market has lost more than $500 billion in value since then. Bitcoin dropped to around $104,000, Ethereum fell to $3,500, and both BNB and SOL saw declines of more than 20%.

Altcoins were hit even harder. The GMCI-30 index — which tracks the top 30 cryptocurrencies — fell 12% last week. Gaming tokens lost 21%, Layer-2 networks were down 19%, meme coins fell 18%, and mid/small cap tokens dropped between 15% and 16%. Only sectors like AI (-3%) and DePIN (-4%) showed some strength, thanks in part to strong performance from tokens like TAO.

Wintermute summed it up clearly: crypto is currently the worst-performing asset class when compared to others.

This poor performance comes despite the fact that central banks are cutting interest rates not because economies are weak, but because they are still relatively strong. The problem is that even though there’s more money in the global financial system, less of it is making its way into crypto markets.

Wintermute’s strategist Jasper De Maere also questioned the old belief in a “four-year crypto cycle” tied to Bitcoin halvings. He says this idea doesn’t apply anymore because the market has matured. It’s no longer about miner supply — it’s all about liquidity now.

On-chain data from CryptoQuant shows that the recent prolonged U.S. government shutdown has made things worse. It’s not just a political issue — it’s causing a freeze in liquidity across Bitcoin and other digital assets. According to the Congressional Budget Office (CBO), this kind of shutdown could cut $7–14 billion from U.S. economic output.

So what we’re seeing isn’t just uncertainty — it’s a freeze on financial flows into crypto. And even though there may be a rebound once the shutdown ends, data suggests investor confidence and capital will take much longer to return.