TL;DR
- JPMorgan observes early signs of crypto market stabilization after the year-end sell-off, citing easing ETF outflows and calmer derivatives positioning.
- Key factors include reduced selling pressure in Bitcoin and Ether ETFs and MSCI’s decision to keep crypto-heavy stocks in its indexes, avoiding forced selling.
- The report views the downturn as a positioning adjustment rather than a liquidity crisis, with market depth remaining healthy.
JPMorgan reports evidence of stabilization after the year-end pullback in crypto. The bank notes ETF flows for Bitcoin (BTC) and Ethereum (ETH) are easing outflows in January, while perpetual futures and CME positioning show a reset that no longer pressures prices. Analysts led by Nikolaos Panigirtzoglou attribute the drawdown to positioning, not impaired liquidity.
December delivered a clear picture: funds tied to BTC and ETH posted meaningful redemptions, in contrast with record allocations into global equity ETFs. That rotation trimmed crypto exposure and pushed bitcoin and major altcoins into tighter ranges. Early-January flow trackers now point to a less bearish tone.
The JPMorgan team flags relief across perpetuals and internal CME position proxies
The fourth-quarter selling impulse loses traction; hedges step down, and open interest stops expanding on dips. For institutional desks, that pattern signals realized profit-taking and a lower risk of forced supply.
The report also highlights MSCI keeping digital-asset treasury firms inside February benchmarks. The decision removes a near-term trigger for automatic selling in equities linked to Bitcoin treasuries, including Strategy, and tempers the threat from passive outflows over the next rebalance.
In parallel, the bank reviews market breadth metrics on CME bitcoin futures and major BTC ETFs. The series do not show an abnormal rise in price impact per unit of volume, a sign of healthy order-book depth. The reading supports a view of a positioning adjustment rather than a microstructure failure.
BTC trades near psychological marks that guide tape action; ETH follows with lower beta. If ETF creations turn positive for several sessions and perpetuals maintain funding near neutral or slightly positive, the market can defend the range without inviting a fresh leg lower.
JPMorgan concludes the bulk of de-risking already ran its course. January delivers early stabilization signals: ETF pressure fades, derivatives normalize, and liquidity holds. The market has not broken higher yet, but it starts to build a tradeable base.
For portfolio managers and traders, a mix of steadier flows and calmer derivatives changes day-to-day execution. Staggered bids return, limit orders populate support, and hedge sizing adapts to basis and funding behavior. Priority shifts to tail-risk control around event dates and to tracking the balance between ETF creations and spot selling by treasuries.
