JPMorgan claims native crypto investors spearheaded last week's heavy liquidation

• JPMorgan analysts led by Nikolaos Panigirtzoglou said that crypto-native investors are responsible for the market plunge last weekend.
• The analysts stated that Bitcoin ETFs saw minimal outflows compared to retail trading platforms.
• The crypto market witnessed its highest single-day liquidation, totaling $19 billion, last Friday.

JPMorgan analysts claim that crypto-native investors largely drove the crypto market dip last week, while institutional products felt a minor impact.

Crypto-native traders responsible for recent market dip

The crypto market's sharp downturn last week, marked by widespread liquidations, was likely triggered by crypto-native investors rather than institutional players or retail ETF holders, according to JPMorgan analysts led by Nikolaos Panigirtzoglou in a Thursday report.

The analysts noted that spot Bitcoin (BTC) exchange-traded funds (ETFs) did not feel much of the weight of the dip, seeing modest outflows of $220 million between Friday and Tuesday. Ethereum (ETH) ETFs were more impacted, recording $370 million in net outflows within the same period.

To support claims of institutional resilience, the analysts also pointed to data from CME Bitcoin futures, which showed minimal liquidations during the market slump.

Maintaining the same tone as their ETF counterparts, CME Ethereum futures experienced more pronounced deleveraging, which JP Morgan analysts attributed to "greater de-risking" by momentum-driven traders such as commodity trading advisors and quantitative funds.

The crypto market saw its largest single-day liquidation event on record last Friday, sparked by fresh tariff-related comments from US President Donald Trump. Over $19 billion in leveraged positions were wiped out from the crypto market as Bitcoin, Ethereum, and the broader altcoins category tumbled sharply.

Open interest in Bitcoin and Ethereum perpetual contracts plunged by roughly 40% in dollar terms, a drop that outpaced the assets' price declines. This shows that crypto-native investors were the main force behind last week's selloff, while traditional participants using CME futures or crypto ETFs largely stayed on the sidelines, the bank noted.

The crypto market witnessed a decline on Thursday, with Bitcoin falling over 2% and hitting a low of $108,000. Altcoins weren't spared as ETH, XRP and Solana (SOL) declined 3%, 4% and 5%, respectively.