Transition to "Trend Allocation" — Garrett Jin points out the structural evolution of the cryptocurrency market

Garrett Jin’s latest market analysis posted on the X platform is attracting attention. The cryptocurrency market is entering a new phase characterized by a shift toward trend allocation, and the increasing participation of institutional investors is not the end of a bullish cycle, but rather a sign of a fundamental structural transformation in the market, he argues. According to a report by PANews on January 21, some media tend to misunderstand this view.

The Market Transformation Brought by Inflows from Institutional Investors

As capital inflows from institutional investors accelerate, the cryptocurrency market is transitioning from speculative dynamics to a more allocation-oriented approach. Historical data shows that in the Chinese A-share market and the US stock market, large-scale participation by institutional investors has led to more stable, trend-driven market structures. Currently, Bitcoin and Ethereum are following a similar trajectory.

The expansion of ETF assets under management and strategic purchases of digital assets by governments worldwide are pushing prices upward while significantly reducing volatility. This is a phenomenon consistent with fundamental market principles. The influx of funds from institutional investors is rapidly shifting the market power balance from a retail-investor-led era to an institutional-investor-led era.

Paradigm Shift from Speculation to Allocation

The key points of Mr. Wintermute’s original analysis report are that mainstream cryptocurrencies like BTC and ETH are transforming from mere speculative tools into assets suitable for allocation. Several indicators clearly demonstrate this trend allocation shift.

First, trading volume from institutional investors has surpassed that of individual investors by a large margin. Next, trading and capital inflows related to so-called altcoins are rapidly decreasing. By the second half of 2025, inflows from institutional investors are expected to accelerate, further strengthening the dominance of mainstream assets following last October’s market correction. Structural disparities with smaller assets continue to widen. After the market decline, retail investors’ surplus funds are concentrated in Bitcoin and Ethereum as defensive holdings.

Characteristics of a Mature Market Demonstrated by Bitcoin and Ethereum

Until now, the cryptocurrency market has been characterized by “retail-led, high volatility, and dominance of small assets.” This phase is clearly coming to an end. Jin states that this should not be seen as the end of a bull market, but rather as a phase transition within the market’s maturation process.

The market is undergoing a systematic transformation. From speculation to allocation, from retail sentiment-driven to institutional position-driven, and from extreme volatility to stable volatility at the institutional level—all these changes are happening simultaneously. The trends in Bitcoin’s price movements and Ethereum’s market share changes make this evolution obvious.

A New Era of Trend Allocation in the Digital Asset Market

Interpreting this market maturation process simply as “the end of a bull market” is a fundamental misunderstanding of the development logic of the cryptocurrency market. The shift toward trend allocation indicates that the market is gaining higher maturity and stability.

With deeper participation from institutional investors, the price formation mechanism is evolving toward a more rational and predictable direction. Extreme position-building and emotional buying and selling are decreasing, while trading patterns based on long-term asset allocation strategies are becoming dominant. Properly understanding this systematic transformation of the market will be an extremely important perspective for future investment decisions.