Cryptocurrencies might have a relatively short history, but they have already experienced numerous pivotal moments. With recent ETF launches, the current season heralds a new era for digital assets. Donald Trump’s election victory sparked a wave of regulatory and structural changes essential for institutional investment. In its latest market note, JPMorgan highlights the ongoing transformation within the cryptocurrency landscape.
JPMorgan and Cryptocurrencies
JPMorgan analysts suggest that cryptocurrencies are evolving from a venture capital-driven ecosystem to one supported by institutional liquidity. The bull market of 2021 saw the last cryptocurrency surge backed primarily by venture capital. In 2022, several venture capital firms collapsed. Behemoths like Celsius, which had accumulated capital from crypto investors to lend to these firms, also faced bankruptcy.
Cryptocurrencies are now firmly transitioning into this new era.
Cryptocurrencies are shifting away from a venture capital-based ecosystem, becoming a typical investable macro asset class supported by institutional liquidity rather than individual speculation. In the early stages, crypto projects witnessed significant private funding rounds, with only a few structured to trade in a liquid, scalable manner. Individual investors made late buys when valuations had already spiked significantly.
With the waning participation of individual investors, this area has become more reliant on institutional investors to stabilize flows, reduce volatility, and stabilize long-term prices. Cryptocurrencies continue to present investment opportunities because, although relatively liquid, they remain structurally inefficient, causing significant price fluctuations due to imbalanced liquidity.
Increasing Risk Appetite
Indeed, cryptocurrencies are undergoing a significant structural transformation. But why is the situation so bleak in the ETF channel? Is the entire ETF market in the same state? A report by TKL focuses on the status of assets under management in leveraged ETFs in the U.S. By the third quarter of 2025, an all-time high of $239 billion was reached, marking a consecutive quarterly increase of +$77 billion.
The total value has doubled since the beginning of 2024 and tripled since 2023. During all these developments, approximately 60% of S&P 500’s daily option volume now originates from 0DTEs, indicating that risk appetite remains strong in markets outside of crypto.
