Key Takeaways
Are institutions buying Bitcoin and Ethereum during the crash?
US institutions aggressively bought BTC and ETH during the sell-off, viewing it as a buying opportunity.
What leverage is driving the market now?
Institutional investors use market-neutral leverage strategies such as basis trades, and not risky retail bets.
Bitcoin [BTC] and ether [ETH] There was strong institutional buying even as the market faced its largest single-day liquidation ever.
Data from CME and Coinbase showed that, rather than retreating, hedge funds used the crash to increase their exposure, turning the sell-off into a buying opportunity as BTC and ETH began to recover.
Institutional buyers step in as BTC crashes
During Bitcoin’s sharp drop from $123,000 to $110,000 on October 10, a surprising trend emerged: institutional investors bought.
Source: CryptoQuant
The Coinbase Premium Index, which tracks price differentials between US-based Coinbase and global exchange Binance, rose to its highest level since March 2024. In fact, the recent spike was indicative of major US players actively accumulating BTC while others panicked.
It appears that major investors are now viewing market declines as buying opportunities and not as warning signs.
The market also supports Ethereum
ETH saw a similar one – and even more dramatic – response.
Source: CryptoQuant
On October 10, as crypto prices plummeted, Ethereum’s Coinbase Premium Gap shot up to a record-breaking 6.0, its highest level in 2025.
This means that ETH was trading much higher on Coinbase than on Binance, so US institutions aggressively bought the dip.
Source: TradingView
At the same time, the ETH/BTC pair also recovered sharply in the aftermath, from around 0.033 BTC on October 11 to almost 0.036 BTC on the 13th.
This recovery showed that Ethereum outperformed Bitcoin during the post-liquidation rebound.
A new kind of leverage is taking over BTC
There’s more the momentum.
Source: CryptoQuant
Bitcoin Open Interest reached a record $34.9 billion across all exchanges, with a third of that on CME, the go-to platform for hedge funds and asset managers.
Unlike retail cycles that relied on directional bets, this growth comes from basis trades and other market-neutral positions aimed at stable returns.
Source: CryptoQuant
These positions are aimed at achieving stable returns and not chasing wild price swings. With stable funding rates and short-term contracts dominating, it is clear that institutional players are now using leverage as a tool for risk-managing returns.