Wall Street bank JPMorgan is taking a constructive tone on crypto despite this year’s slide, arguing that institutional flows and regulatory clarity could support the next leg up for digital assets.
“We are positive on crypto markets for 2026 as we expect a further increase in the flow of digital assets, but more led by institutional investors,” analysts led by Nikolaos Panigirtzoglou said in Monday’s report.
Optimism comes despite the recent sharp correction, which dragged down Bitcoin lower than the bank’s estimated cost of production, a level that has historically served as a soft floor price. The world’s largest cryptocurrency was trading around $66,300 at press time.
Crypto markets have suffered a sharp pullback in recent weeks. Bitcoin briefly fell below key breakeven points related to miner production costs, compressing sentiment and reducing on-chain activity.
Despite the decline, volatility remains high and institutional interest has held up better than retail engagement, paving the way for a potential rebound if capital rotation into digital assets resumes.
Analysts now estimate the cost of producing bitcoin at around $77,000, down significantly in recent weeks. Although prolonged trading below this level could put pressure on miners and force higher-cost operators to shut down, thereby reducing the overall cost of production, the bank believes that the dynamic will eventually self-correct.
At the same time, the relative attractiveness of bitcoin has improved. Gold has significantly outperformed BTC since October, while the precious metal’s volatility has sharply increased. According to the report, this combination makes BTC more attractive than gold in the long term.
JPMorgan expects digital asset flows to rebound in 2026, led primarily by institutional investors rather than retail traders or digital asset treasuries (DATs). This shift, he says, will likely be supported by further regulatory progress in the United States, including the potential passage of additional crypto laws such as the Clarity Act.
Learn more: Bitcoin is a tech business for now, not digital gold, says Grayscale
