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JPMorgan optimistic about cryptocurrency for the remainder of the year as institutional investments expected to fuel recovery.
Following bitcoin’s decline beneath its estimated production cost, the bank indicated that stronger fundamentals and increasing institutional investments could boost cryptocurrency in 2026.
JPMorgan adopts a positive outlook on cryptocurrency heading into 2026, anticipating that institutional investments will drive a recovery. (Shutterstock, modified by CoinDesk)
Key Points:
- JPMorgan projects that renewed institutional investments will elevate crypto markets in 2026.
- Bitcoin’s estimated production cost has decreased to $77,000, establishing a potential new balance following miner capitulation.
- Further U.S. legislation concerning cryptocurrency could clarify the landscape, facilitating increased institutional involvement, according to the bank.
JPMorgan is maintaining an optimistic stance on cryptocurrency despite this year’s significant downturn, suggesting that institutional investments and regulatory clarity could support the next upward movement for digital assets.
"We are optimistic about the crypto markets for 2026, as we foresee a further increase in digital asset flows, primarily driven by institutional investors," the report authored by analysts led by Nikolaos Panigirtzoglou stated.
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This positivity persists despite the recent notable decline, which saw bitcoin falling below the bank’s estimated production cost, a price point that has historically functioned as a soft support level. At the time of publication, the largest cryptocurrency was trading around $66,300.
Cryptocurrency markets have experienced a significant downturn over the past weeks. Bitcoin briefly dipped below critical breakeven points related to miner production costs, dampening sentiment and reducing on-chain activity.
Notwithstanding the decline, volatility remains high, and institutional interest has shown resilience compared to retail participation, positioning the market for a potential recovery if capital begins to flow back into digital assets.
The analysts now approximate bitcoin’s production cost at about $77,000, a notable decrease in recent weeks. While extended trading below this threshold could pressure miners and push higher-cost operators out of the market, thereby reducing the overall production cost, the bank perceives this situation as ultimately self-correcting.
Simultaneously, bitcoin’s relative attractiveness has increased. Gold has significantly outperformed BTC since October, while the volatility of the precious metal has surged sharply. This combination, the report suggested, enhances BTC’s appeal compared to gold over the long term.
JPMorgan anticipates a resurgence in digital asset flows in 2026, primarily driven by institutional investors rather than retail traders or digital asset treasuries (DATs). This transition, according to the bank, will likely be bolstered by additional regulatory advancements in the U.S., including the potential enactment of new cryptocurrency legislation like the Clarity Act.
Read more: Bitcoin a tech trade for now, not digital gold, says Grayscale
