JPMorgan's analysis of the October 2025 crypto market crash reveals that crypto-native traders, not institutional investors, were the primary drivers of the sharp downturn. The bank reported that leveraged positions on offshore platforms led to massive liquidations, with perpetual futures for Bitcoin and Ethereum experiencing a 40% drop in open interest, far exceeding spot price declines.
Institutional and ETF investors remained largely steady, with Bitcoin spot ETFs seeing only $220 million in outflows (0.14% of assets under management), while Ethereum ETFs recorded $370 million in outflows (1.23% of AUM). JPMorgan analysts emphasized, "ETF flows held up well, showing long-term investor stability," highlighting a growing divide between regulated and unregulated market segments.
The crash, intensified by geopolitical news like new tariffs on China, resulted in over $20 billion in long positions liquidated on October 11, 2025, one of the largest such events in crypto history. Bitcoin briefly fell below $106,000 before recovering, but CME futures for both assets showed minimal institutional panic, underscoring that the volatility was concentrated among crypto-native speculators.
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