Wintermute: Declaring a Cryptocurrency Market Bottom is Premature, but Risk Appetite is Clearly Returning

June 16 – Wintermute’s latest weekly market report attributes the rebound in risk assets to two key positive drivers. First, U.S. May CPI rose 4.2% year-over-year, marking the third consecutive monthly acceleration and hitting its highest level since 2023. Crucially, the print came in line with market expectations, easing investor fears about inflation spiraling out of control. Meanwhile, core CPI fell to 2.9%, signaling energy-driven inflation pressures may be peaking rather than spilling over into the service sector or fueling wage growth. Second, the over 100-day Iran conflict has ended, with U.S. President Donald Trump approving the resumption of navigation through the Strait of Hormuz and lifting the maritime blockade. A formal agreement is set to be signed in Switzerland on June 19. As geopolitical risk premiums rapidly faded, Brent crude oil dropped from around $110 to the $80 range, falling another 6.6% this week. Concurrently, both the U.S. Dollar Index and U.S. bond yields declined, further boosting market risk appetite. Cross-asset performance shows clear "risk-on sentiment returning" trends: The Russell 2000 Index rose 4.0%, the Nasdaq Index gained 2.3%, and the total market capitalization of altcoins increased by 3.1% – while oil, which had been strong recently, turned into the week’s worst-performing asset. Wintermute notes the market’s main focus has shifted to the upcoming Federal Reserve interest rate meeting. The 4.2% headline inflation reading supports a "higher-for-longer" policy stance, but falling core inflation and oil prices suggest current inflation pressures may be temporary. Markets broadly expect no rate adjustment at this meeting, making the dot plot, economic forecasts, and new Fed Chair Jerome Powell’s first press conference critical for shaping the second half’s market direction. On the crypto front, Wintermute argues the recent rebound is purely risk-asset sentiment recovery, not a new uptrend. The report clarifies Bitcoin’s 14% weekly drop two weeks ago wasn’t driven by the widely cited claim that Strategy sold 32 BTC – instead, factors like rising inflation fears, strong non-farm payroll data, and stalled momentum in its $60,000-to-$83,000 rally were the main catalysts. While Bitcoin rebounded this week, altcoins rose broadly while Ethereum posted a countertrend decline, remaining relatively weak. Wintermute states crypto’s true turning point ties to fund flows, not prices. Currently, there are no significant improvements in net stablecoin inflows, spot ETF fund flows, or digital asset treasury sizes – making it far too early to call the market bottomed. To confirm a new crypto uptrend, the firm points to needs for consistent ETF inflows, renewed stablecoin issuance, and institutional capital re-entering the market.