What happened?
Since April the crypto market has lagged equities, with Bitcoin down more than 15% in the last 30 days despite a Fed rate cut and the announcement to end QT. Liquidity is expanding globally but capital isn’t flowing into crypto — ETF inflows have stalled and DAT activity on major tokens has dried up. The selloff wiped out over $19 billion of leverage and roughly $500 billion of market value as altcoins, mid and small caps plunged.
Who does this affect?
Retail and institutional investors holding Bitcoin, Ethereum, Solana, BNB and altcoin-heavy portfolios are directly hit by the price drops and thin liquidity. Fund managers, crypto treasuries and market makers face tighter markets and limited ability to redeploy capital because ETF and DAT flows have stalled. Miners, DeFi projects and smaller token teams also feel the squeeze as funding, trading volume and on-chain treasury moves slow down.
Why does this matter?
This matters because liquidity — not the old four‑year cycle mechanics — is the main driver of performance now, so a lack of inflows means crypto can keep underperforming equities. A prolonged liquidity squeeze, compounded by the U.S. government shutdown, can turn a short selloff into a longer stress test for conviction, funding and market structure. For markets that means higher volatility, thinner depth and the real risk that prices stay depressed until clear ETF/DAT capital flows return, so investors should watch flow signals and manage risk.