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Crypto Market Sell-Off Was Driven by Retail Investors, JPMorgan Says

Crypto markets have seen significant profit taking in recent weeks with retail investors playing a bigger role than institutions, the report said.

Updated May 2, 2024, 4:02 p.m. Published May 2, 2024, 4:00 p.m.
JPMorgan maintains its cautious stance on crypto markets. (Shutterstock)
JPMorgan maintains its cautious stance on crypto markets. (Shutterstock)
  • JPMorgan maintained its cautious view on crypto markets.
  • The bank said retail investors have been taking profits in recent weeks.
  • The market is still faced with headwinds such as elevated positioning, the report said.

Wall Street giant JPMorgan (JPM) said it's keeping its cautious stance on cryptocurrency markets in the near term due to a lack of positive catalysts and because the retail impulse is disappearing.

The bank notes that retail investors sold both crypto and equity assets in April and spot bitcoin exchange-traded funds (ETFs) have seen outflows. The three headwinds the bank has already identified – elevated positioning, high bitcoin prices versus gold and versus the estimated bitcoin production cost, and subdued crypto venture capital (VC) funding – are also still in place.

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Cryptocurrency markets have seen significant profit taking in recent weeks, with retail investors playing a bigger part in the sell-off than institutional investors, the report said. Bitcoin fell 16% in April, the biggest monthly decline since June 2022.

광고

Investors sold U.S.-based spot bitcoin ETFs at the fastest pace ever on Wednesday. The 11 ETFs saw a cumulative net outflow of $563.7 million, the largest since the funds started trading on Jan. 11.

With regards to institutional investors, “it has been mostly momentum traders such as commodity trading advisors (CTAs) or other quantitative funds taking profit on previous extreme long positions in both bitcoin and gold,” analysts led by Nikolaos Panigirtzoglou wrote.

Still, analysis of the futures market suggests a “more limited position reduction by other institutional investors outside quantitative funds and CTAs,” the authors wrote.

Read more: Bitcoin Could Drop Further to as Low as $50K, Standard Chartered Says

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Exchange Review - March 2025

Exchange Review March 2025

CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.

알아야 할 것:

Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.

  • Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
  • Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions. 
  • Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.

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