JPMorgan Turns Bullish on Crypto for 2026 as Institutional Inflows and Regulation Drive Outlook

JPMorgan is adopting a constructive outlook on the cryptocurrency market despite the sharp correction seen earlier this year. The Wall Street banking giant believes that rising institutional inflows and improved regulatory clarity could fuel the next major rally in digital assets, particularly bitcoin.

In a recent report led by analyst Nikolaos Panigirtzoglou, JPMorgan said it expects stronger digital asset flows in 2026, primarily driven by institutional investors rather than retail traders. The bank’s optimism comes even as bitcoin recently slipped below key production cost levels, a metric often viewed as a soft price floor. Bitcoin was trading near $66,300 at the time of writing, below JPMorgan’s updated estimated production cost of approximately $77,000.

The broader crypto market has experienced a significant pullback in recent weeks, with bitcoin briefly dropping under miner breakeven levels. Historically, sustained trading below production costs can pressure crypto miners, forcing higher-cost operators offline. However, JPMorgan views this as a self-correcting mechanism that could ultimately stabilize bitcoin mining economics and support long-term price recovery.

Market volatility remains elevated, but institutional interest in cryptocurrency appears more resilient than retail participation. Analysts suggest that if capital rotation into digital assets resumes, bitcoin and the broader crypto market could see renewed upside momentum.

JPMorgan also highlighted bitcoin’s improving relative value compared to gold. Since October, gold has outperformed BTC, while gold’s volatility has increased significantly. This shift in risk-reward dynamics may enhance bitcoin’s long-term appeal as a digital store of value.

Looking ahead, JPMorgan expects regulatory progress in the United States, including potential passage of legislation such as the Clarity Act, to provide additional support for crypto markets. With clearer rules and stronger institutional participation, the bank believes 2026 could mark the beginning of the next upward phase for bitcoin and digital assets.