Crypto ETF Stabilization Signals End of De-Risking, JPMorgan

• JPMorgan says crypto de-risking is fading as bitcoin and ether ETF flows show stabilization.
• Futures data and positioning point to easing selling pressure after late 2025 selloffs.
• MSCI keeping crypto-linked firms in equity indices helped calm markets after correction.

Crypto markets may be moving beyond a prolonged phase of forced risk reduction, according to a new assessment from JPMorgan. The bank said stabilizing exchange-traded fund flows now point to a different market structure emerging.

JPMorgan analysts reported that the heavy de-risking seen through late 2025 appears to have largely run its course. They linked this shift to early signs of balance returning between institutional and retail activity.

The report said December marked a key stress point. Bitcoin and ether ETFs recorded outflows during that month. At the same time, global equity ETFs attracted record inflows totaling $235 billion. However, conditions began to change in early January. JPMorgan said multiple indicators now show signs of stabilization. These signals suggest selling pressure across crypto markets has eased.

ETF Flows and Derivatives Pressure Ease

According to the report, Bitcoin and ether ETF flow data now show early signs of bottoming out. The analysts said this pattern contrasts with the sharp withdrawals seen late last year. In addition, futures market positioning has begun to stabilize. Perpetual futures data and CME Bitcoin futures positioning both indicate reduced selling activity.

The analysts said these trends point to fading stress across leveraged crypto markets. They added that both retail and institutional investors likely completed most position reductions by late 2025.

JPMorgan said the earlier selloff did not stem from worsening liquidity conditions. Instead, the bank pointed to steady market depth across major venues. Liquidity metrics showed limited price impact from trading volumes. These measures included Bitcoin ETFs and CME Bitcoin futures activity.

The analysts said these indicators suggest markets remained functional during the correction. As a result, they ruled out liquidity deterioration as the primary cause of price declines.

MSCI Decision Supports Market Stability

The report also highlighted MSCI’s recent index decision as a stabilizing factor. MSCI chose not to remove Bitcoin and crypto treasury companies from global equity benchmarks. This decision offered temporary relief to crypto-exposed firms. JPMorgan cited companies such as Strategy as direct beneficiaries.

MSCI said it will conduct a broader review of crypto-related companies later. However, the immediate outcome reduced uncertainty for investors holding these equities. JPMorgan linked earlier market stress to an October 10 MSCI announcement. That statement raised concerns about the potential exclusion of Strategy from equity indices.

The analysts said this event triggered widespread de-risking. Investors reduced crypto exposure across ETFs, futures, and related equities. They added that this reaction amplified price declines during the final quarter of 2025. However, they now see evidence that the impact has faded.

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The report said January data shows stabilization across flow and positioning indicators. JPMorgan described this shift as a sign that the forced reduction phase has ended. According to the analysts, capital now appears more selective. Investors seem to differentiate between assets rather than exit the market broadly.

This pattern suggests crypto assets may be entering a new phase. JPMorgan said crypto now behaves more like a normalized risk segment. The bank added that crypto assets increasingly integrate into traditional portfolio frameworks. This trend could affect allocation strategies and regulatory treatment.

JPMorgan stressed that the market has not returned to unchecked speculation. Instead, it described current conditions as more balanced.

The report concluded that systemic stress has eased. Crypto markets now show signs of equilibrium after a volatile period. Analysts said further confirmation will depend on sustained ETF stability. For now, they see evidence that the de-risking era has largely ended.