JPMorgan Says the Crypto Selloff May Be Nearing a Bottom as ETF Outflows Ease

Why It Matters

If the downturn is indeed bottoming, institutional capital could re‑enter crypto, reviving price momentum and reshaping risk‑on allocations across asset classes.

Key Takeaways

• JPMorgan sees crypto sell‑off nearing bottom
• Bitcoin/ether ETF outflows slowed in January
• CME futures positioning indicates reduced de‑risking
• MSCI kept crypto firms in benchmarks, easing pressure
• Liquidity metrics show no major market strain

Pulse Analysis

The crypto market’s recent correction has been marked by pronounced ETF outflows and a sharp pullback in futures positions, reflecting heightened risk aversion after a year of strong gains. JPMorgan’s latest flow analysis shows that the intensity of de‑risking has tapered, with Bitcoin and Ether exchange‑traded funds seeing inflow stabilization in January. This shift suggests that the most aggressive sell‑side pressure may have run its course, allowing price ranges to tighten and market breadth to improve.

A pivotal factor in this emerging stability is MSCI’s decision not to exclude bitcoin and crypto‑related treasury firms from its global equity benchmarks during the February 2026 review. By keeping these firms in index compositions, MSCI removes a structural trigger for forced selling that had loomed over institutional portfolios. The move not only offers short‑term relief but also signals a broader acceptance of digital assets within traditional asset‑allocation frameworks, encouraging fund managers to consider crypto exposure without fearing abrupt benchmark‑driven exits.

Looking ahead, the convergence of softened ETF outflows, steadier CME futures positioning, and supportive index policies points toward a potential market bottom. Investors may interpret these signals as an invitation to redeploy capital, especially as liquidity metrics show no significant deterioration. While volatility is likely to persist, the reduced pressure could pave the way for a measured rally, prompting asset managers to recalibrate crypto allocations within diversified strategies. Continued monitoring of flow data and benchmark decisions will be essential to gauge the durability of this tentative recovery.