Analysis: The recent fall in the crypto market is primarily driven by retail investors selling Bitcoin and Ether spot ETFs.

On November 21, JPMorgan analysts stated that the recent pullback in the crypto market—especially exacerbated after Bitcoin fell below the bank's estimated production cost/support level of $94,000—was primarily driven by retail investors selling Bitcoin and Ether Spot ETFs, rather than by crypto-native traders. “While crypto-native investors caused the market pullback in October through significant deleveraging (especially in Perptual Futures), this deleveraging in Perptual Futures seems to have stabilized in November,” wrote Nikolaos Panigirtzoglou, Managing Director at JPMorgan, and his team in a report on Wednesday. “In contrast, the main force driving the continued pullback in the crypto market in November has been non-crypto investors, particularly those retail investors who entered the crypto market through Bitcoin and Ether Spot ETFs.” Analysts pointed out that so far this month, retail investors have pulled approximately $4 billion from Bitcoin and Ether Spot ETFs, a scale that has already surpassed the historical record net outflow of February. This behavior sharply contrasts with the flow of funds from retail investors in the stock market. In November, retail investors have poured about $96 billion into stock ETFs (including leveraged products)—if this pace continues until the end of the month, the total will approach $160 billion, comparable to the levels of September and October. They noted that retail investors had previously exhibited similar “divergent behavior”: strongly buying stocks on one hand, while selling crypto ETFs in only a few months (this year only in February, March, and now November). This shows that retail investors still view crypto assets and stocks as two independent baskets of assets, even though both are risk assets.