Bitcoin Correction May Be Reaching Its End, According to JPMorgan's ETF Outflow Analysis

Investment bank JPMorgan Chase & Co. suggests that the recent downturn in the cryptocurrency market is nearing its end, as indicated in their latest report.

Key Takeaways

JPMorgan believes the sharp sell-off in cryptocurrency, particularly Bitcoin and Ethereum, is mostly over.
The slowdown of outflows from crypto exchange-traded funds (ETFs) since January signals a stabilization in the market.
MSCI's decision to retain crypto-related companies in its indices contributed to easing market fears and expectations for a bottom in cryptocurrency prices.

JPMorgan says crypto sell-off nears exhaustion after MSCI relief

Overview of Market Conditions

According to JPMorgan’s analyst Nikolaos Panigirtzoglou, the significant sell-off in Bitcoin and Ethereum has slowed greatly since early January. The indicators for futures trading show that investor selling is likely to conclude by the end of 2025.

JPMorgan's Insights on the Crypto Market Downturn

Despite the recent challenges, JPMorgan reported that market liquidity remains strong. The bank attributed the present correction largely to risk management efforts triggered by MSCI’s announcement in October that crypto-related companies risk being delisted from various indices.

Fortunately, MSCI has since announced that they will not be excluding crypto-related entities from their global equity index review scheduled for February 2026, providing the market with short-term stability. This decision has mitigated concerns about forced sell-offs linked to index changes and bolstered expectations for a price bottom in the cryptocurrency sector.

As of Friday, Bitcoin was trading at around $94,000, according to the latest market data. This indicates a renewed sense of stability following a tumultuous period for cryptocurrencies.

In summary, JPMorgan’s analysis suggests that the worst of the market correction may be behind us, thanks to slowed ETF outflows and supportive decisions from major financial indices.