18 October, 2025
jpmorgan-reports-crypto-native-investors-drive-market-dip

JPMorgan analysts have identified crypto-native investors as the primary force behind last week’s significant downturn in the cryptocurrency market. The analysis, led by Nikolaos Panigirtzoglou, highlights that while retail trading platforms faced heavy liquidations, institutional products largely remained insulated from the impact.

The cryptocurrency market experienced its largest single-day liquidation event last Friday, wiping out more than $19 billion in leveraged positions. This sharp decline was reportedly triggered by tariff-related remarks from US President Donald Trump, which unsettled traders and led to a wave of sell-offs across various digital assets.

Market Trends and ETF Flows

According to the report, Bitcoin exchange-traded funds (ETFs) experienced only modest outflows, totaling $220 million between Friday and the following Tuesday. In contrast, Ethereum ETFs faced a more substantial impact, with net outflows reaching $370 million during the same period. This discrepancy suggests that crypto-native traders were more active in the market’s decline, while institutional investors maintained a more stable position.

The analysts pointed to data from CME Bitcoin futures, which indicated minimal liquidations amid the market slump. This further reinforced the notion that institutional players, who typically engage with futures contracts, were not as heavily affected. Conversely, CME Ethereum futures saw more significant deleveraging, which analysts attributed to “greater de-risking” tactics employed by momentum-driven traders, including commodity trading advisors and quantitative funds.

Impact on Major Cryptocurrencies

In the wake of the market’s turmoil, Bitcoin’s price fell over 2%, reaching a low of $108,000, while altcoins also experienced declines. Ethereum, XRP, and Solana saw their prices drop by 3%, 4%, and 5%, respectively. The sharp decline in open interest for Bitcoin and Ethereum perpetual contracts, which fell by approximately 40% in dollar terms, suggests a concentrated sell-off among crypto-native investors, further underscoring the divide between traditional institutional participants and retail traders.

As the market stabilizes, analysts are closely monitoring trends, looking to understand the long-term implications of such pronounced liquidations. The recent volatility raises questions about the resilience of both retail and institutional investors in the face of sudden market shifts.

While the immediate impact of last week’s events may have subsided, the cryptocurrency landscape remains dynamic, with traders and investors keen to gauge the next moves in this rapidly evolving sector.