Wall Street bank JPMorgan is taking a constructive tone on cryptocurrencies despite the decline so far this year, arguing that institutional inflows and regulatory clarity could underpin the digital assets’ next bull run.
“We are positive on crypto markets for 2026 as we expect a further increase in the flow of digital assets, but more driven by institutional investors,” analysts led by Nikolaos Panigirtzoglou said in Monday’s report.
Optimism comes despite the recent strong correction that dragged down bitcoin below the bank’s estimated cost of production, a level that has historically acted as a soft floor price. The world’s largest cryptocurrency was trading around $66,300 at the time of this publication.
Crypto markets have suffered a sharp decline in recent weeks. Bitcoin briefly fell below key breakeven levels linked to miners’ production costs, compressing sentiment and curtailing on-chain activity.
Despite the drop, volatility remains elevated and institutional interest has held up better than retail engagement, setting the stage for a potential rebound if capital rotation into digital assets resumes.
Analysts now estimate the cost of producing bitcoin at approximately $77,000, a significant decline in recent weeks. While prolonged trading below that level could put pressure on miners and force higher-cost operators to go offline, which in turn would reduce the aggregate production cost, the bank believes the dynamic is 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 increased sharply. That combination, the report argued, makes BTC look increasingly attractive versus gold in the long term.
JPMorgan expects a rebound in digital asset flows in 2026, led primarily by institutional investors rather than retail traders or digital asset treasuries (DATs). That shift, he says, will likely be supported by further regulatory developments in the US, including the potential passage of additional crypto legislation such as the Clarity Act.
Read more: Bitcoin is a tech trade for now, not digital gold, says Grayscale
