### JPMorgan Says Crypto Native Investors Likely Behind Recent Market Correction

In a recent report, JPMorgan analysts suggest that the severe correction in crypto markets was primarily driven by crypto native investors rather than institutional or retail ETF holders. This conclusion is based on the observation that there was little evidence of significant liquidation in spot bitcoin exchange-traded funds, which are generally favored by traditional retail investors. Between October 10 and October 14, Bitcoin ETFs experienced modest cumulative outflows of $220 million, accounting for only 0.14% of total assets under management. Ethereum ETFs saw slightly larger outflows, with $370 million leaving, representing 1.23% of their assets under management.

In contrast to these ETF moves, CME bitcoin futures, which are a key indicator of institutional positioning, showed few liquidations. However, CME Ethereum futures experienced heavier deleveraging, likely due to greater de-risking by momentum traders such as commodity trading advisors and quant funds.

The most notable activity was in perpetual futures contracts, which are popular among crypto native traders. Open interest in these contracts for both Bitcoin and Ethereum fell significantly, dropping about 40% in dollar terms. This decline was more pronounced than the price drops of both assets, indicating that crypto native investors were primarily responsible for the market correction.

This market behavior highlights the distinction between crypto native investors and those from traditional financial backgrounds. While crypto native investors aggressively adjusted their positions, non-crypto native investors, including those using CME futures or crypto ETFs, remained largely on the sidelines.