JPMorgan Says Crypto-Native Investors Are Likely Driving the Market Slide

The recent market sell-off was likely led by retail and other crypto-focused investors rather than traditional institutions, according to Wall Street bank JPMorgan (JPM).

While bitcoin BTC$105,344.12 and ether ETH$3,781.73 both fell after October 10, spot BTC exchange-traded funds (ETFs) and Chicago Mercantile Exchange (CME) BTC futures saw little forced selling, the report noted.

Bitcoin ETF outflows totaled just $220 million, or 0.14% of assets under management, compared to $370 million for ether ETFs, or 1.23%, analysts led by Nikolaos Panigirtzoglou wrote in the Thursday report.

A similar pattern showed up in CME futures, with minimal bitcoin liquidations and heavier ether selling, which the bank's analysts attributed to momentum-driven traders reducing risk.

The steepest losses came in perpetual futures, where open interest in bitcoin and ether contracts fell around 40%, outpacing the drop in spot prices, the report added.

JPMorgan said that the scale of unwinding points to crypto-native traders as the main driver of the downturn, with ether hit harder than bitcoin.

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