A recent analysis by JPMorgan Chase & Co. indicates that the severe cryptocurrency market downturn and record liquidations last week were predominantly driven by experienced, “native” crypto traders, rather than institutional investors or traditional retail funds.
The report, led by managing director Nikolaos Panigirtzoglou, found that open interest in perpetual Bitcoin and Ethereum contracts — favored by crypto-native traders — plummeted approximately 40% in dollar value. This reduction surpassed the assets’ own price declines, suggesting a significant de-leveraging by active participants within the crypto ecosystem.
In stark contrast, institutional investment vehicles demonstrated resilience. Bitcoin exchange-traded funds (ETFs) recorded modest accumulated outflows of only $220 million between October 10 and 14, representing a mere 0.14% of their assets under management.
Ethereum ETFs experienced slightly larger, though still limited, withdrawals totaling $370 million, or 1.23% of managed assets during the same period.
Bitcoin futures contracts on the Chicago Mercantile Exchange (CME), often used as a barometer for institutional positioning, showed no signs of widespread liquidations. While CME Ethereum futures did exhibit some de-leveraging, analysts attributed this to quantitative traders and commodity trading advisors managing risk.
The market correction saw over $20 billion in leveraged positions liquidated last Friday, impacting more than 1.5 million traders globally. This followed a new round of U.S. trade tariffs.
Bitcoin had recently touched an all-time high exceeding $126,000 before falling to about $108,200, a 2.3% decrease in a 24-hour period. Market sentiment remains cautious amid global macroeconomic uncertainties.
JPMorgan analysts concluded that without sustained outflows from ETFs or significant reductions in institutional positions, the recent volatility should be viewed as an internal correction within the crypto ecosystem, not a fundamental shift in the appetite of major investors.