Wall Street bank JPMorgan is striking a constructive tone on crypto despite the decline so far this year, arguing that institutional inflows and regulatory clarity could support the next stage higher for digital assets.
“We are bullish on crypto markets for 2026 as we expect a further increase in digital asset flow, but more led by institutional investors,” analysts led by Nikolaos Panigirtzoglou said in Monday’s report.
The optimism comes despite the recent sharp correction, which dragged bitcoin down below the bank’s estimated production costs, a level that has historically acted as a soft price floor. The world’s largest cryptocurrency was trading around $66,300 at the time of publication.
Crypto markets have experienced a steep pullback over the past few weeks. Bitcoin briefly fell below key breakeven levels tied to miners’ production costs, compressing sentiment and trimming onchain activity.
Despite the downturn, volatility remains high and institutional interest has outperformed retail exposure, setting the stage for a potential rebound if capital rotation into digital assets resumes.
Analysts now estimate bitcoin’s production costs at around $77,000, down significantly in recent weeks. While prolonged trading below this level could squeeze miners and force higher-cost operators offline, which in turn lowers overall production costs, the bank sees the dynamic as ultimately self-correcting.
At the same time, bitcoin’s relative appeal has improved. Gold has significantly outperformed BTC since October, while the precious metal’s volatility has risen sharply. This combination, the report argued, makes BTC look increasingly attractive relative to gold in the long term.
JPMorgan expects a rebound in digital asset flows in 2026, primarily led by institutional investors rather than retail traders or digital asset treasuries (DATs). That shift, it says, is likely to be supported by further legislative progress in the US, including potential passage of additional crypto legislation such as the Clarity Act.
Read more: Bitcoin is a technology trade for now, not digital gold, says Grayscale
