According to an analysis by Wall Street giant JPMorgan, the sharp mid-October decline in the cryptocurrency market was driven not by traditional institutional investors, but by leveraged “crypto-native” traders.
JPMorgan — one of Wall Street’s leading banks — explained that the wave of sell-offs that shook the crypto market in the second week of October was primarily fueled by investors native to the sector, rather than traditional financial institutions.
According to the bank’s analysts, despite the decline in Bitcoin and Ethereum prices, forced selling in spot Bitcoin exchange-traded funds (ETFs) and Chicago Mercantile Exchange (CME) Bitcoin futures contracts remained quite limited. This indicates that traditional financial players did not engage in panic selling.
In the report prepared by the analyst team led by Nikolaos Panigirtzoglou, JPMorgan noted that Bitcoin ETFs saw outflows of only $220 million, while Ethereum ETFs recorded $370 million in outflows. This difference suggests that the selling pressure was more concentrated on Ethereum than on Bitcoin.
A similar pattern was observed in the CME futures market. Compared to Bitcoin, Ethereum experienced a heavier wave of selling, which JPMorgan analysts interpreted as momentum-driven traders reducing their exposure.
According to the report, open interest in perpetual futures contracts for both Bitcoin and Ethereum fell by around 40% — a much sharper drop than spot prices — indicating that leveraged positions were rapidly liquidated.
