The market wipeout began when U.S. President Donald Trump shocked investors with his announcement of steep tariffs on Chinese imports, sparking a wave of uncertainty across global markets. Within hours, Bitcoin tumbled to nearly $102,000, dragging altcoins down with it. Many tokens lost half their value, and futures traders faced a brutal chain reaction of forced liquidations.

But according to JPMorgan’s research team led by Nikolaos Panigirtzoglou, institutions were largely on the sidelines during the chaos. In a note to clients, the bank said retail investors – not funds or ETF holders – triggered the downward spiral by overleveraging and panic-selling into cascading losses.

The data backs it up. Between October 10 and 14, spot Bitcoin and Ethereum ETFs saw negligible redemptions – just 0.14% and 1.23% of total assets under management. CME Bitcoin and Ethereum futures, the preferred instruments of professional investors, also remained stable with no major liquidations.

The real damage, JPMorgan found, came from the perpetual futures market, where small traders dominate. Open interest in those contracts collapsed by roughly 40% in dollar terms, far exceeding the price declines in Bitcoin and Ethereum. This massive drop in leverage, the analysts said, confirms that retail traders were at the center of the storm.

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The selloff wiped out more than $20 billion in leveraged positions, making it the largest liquidation in crypto’s history. Over 1.5 million traders were forced out of positions, amplifying volatility across exchanges.

While the scale of the event was historic, JPMorgan analysts argued that the lack of institutional panic is actually encouraging. The resilience of ETF and futures markets suggests that regulated, professional investors remain steady – a stark contrast to the retail crowd’s emotional trading behavior.

For now, Bitcoin is hovering near the $100,000 mark, a key psychological level that many see as the dividing line between capitulation and recovery. Whether this marks the end of the shakeout or merely a pause before the next leg down will depend, once again, on who drives the market – the calm hands of institutions or the restless speculation of retail traders.

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