JPMorgan Exposes the Hidden Drivers of the Historic Crypto Selloff

JPMorgan analysts say the sharp crypto downturn last week, marked by massive liquidations, was mainly fueled by crypto-native investors rather than traditional retail or institutional ETF holders.

According to the report, spot Bitcoin ETFs, typically favored by mainstream investors, saw only minor outflows – about $220 million, or 0.14% of assets – while Ethereum ETFs experienced slightly larger withdrawals totaling $370 million, roughly 1.23% of assets under management.

CME Bitcoin futures showed little liquidation, suggesting institutional traders largely stayed on the sidelines, though Ethereum futures indicated some de-risking by quant funds and momentum traders.

The real pressure came from perpetual futures, commonly used by crypto-savvy traders. Open interest in both Bitcoin and Ethereum perpetual contracts fell roughly 40% in dollar terms, surpassing the actual price drops of the underlying assets. This pattern points to active liquidation by crypto-native investors driving the market turbulence.

Read More:

Gold Rockets, Bitcoin Sleeps – But a Surge Could Be Imminent

Last Friday, the largest leveraged liquidation event in crypto history wiped out more than $20 billion across 1.5 million accounts, spurred in part by renewed U.S.-China trade tensions.

Prices for Bitcoin, Ethereum, and many altcoins plunged sharply before stabilizing slightly. Bitcoin now hovers around $103,800, down roughly 6.8% over the past 24 hours, reflecting continued cautious sentiment among market participants.