JPMorgan "Recent crypto plunge led by individual investors, not institutions"

JPMorgan analyzed that the recent plunge in the virtual asset (cryptocurrency) market, including last week's large-scale liquidations, appears to have been led by individual investors rather than institutions or ETF investors.

On the 16th (local time), according to The Block, the analyst team led by JPMorgan managing director Nikolaos Panigirtzoglou said in a report, "There is little evidence of large-scale liquidations in spot Bitcoin ETFs," and "This adjustment was driven more by investors within the crypto market than by traditional finance."

According to the report, from the 10th to the 14th, spot Bitcoin ETFs saw $220 million (0.14% of assets under management) in outflows. Spot Ethereum ETFs had larger net outflows of $370 million (1.23%), but both were limited relative to the overall market size.

Also, there were no clear liquidation moves in the CME Bitcoin futures market, which is a key indicator of institutional positions. In contrast, the CME Ethereum futures showed somewhat stronger deleveraging (asset sales or capital increases to reduce debt), which JPMorgan explained was due to risk-avoidance adjustments by momentum traders such as quant funds or CTAs (commodity trading advisors).

The most notable movement appeared in the perpetual futures market. JPMorgan said, "Open interest (OI) in Bitcoin and Ethereum perpetual futures fell by about 40% in dollar terms, far exceeding the assets' price declines," and "This pattern suggests that large-scale liquidations by retail investors were the direct cause of the plunge."