Despite the recent sharp decline in Bitcoin, Wall Street investment bank JPMorgan Chase remains relatively optimistic about the future market outlook, believing that a strong recovery could occur this year supported by dual tailwinds: institutional capital returning and clearer regulatory environments.
Led by Nikolaos Panigirtzoglou, the analysis team released a report on Monday stating:
We are optimistic about the cryptocurrency market in 2026, expecting digital asset capital inflows to continue rising, primarily driven by institutional investors.
This optimistic forecast comes amid still fragile market sentiment. Recently, Bitcoin fell below JPMorgan’s estimated “production cost,” which is the average cost of mining. Past experience shows that production costs often serve as a “soft bottom” for Bitcoin prices, providing psychological and structural support.
At the time of writing, Bitcoin’s trading price was $67,656, still below JPMorgan’s latest estimated production cost of $77,000. Notably, this cost estimate has been significantly revised downward compared to previous weeks.
Analysts pointed out that if Bitcoin prices remain below production costs for an extended period, some miners may be forced to exit the market. As hash rate declines, overall mining difficulty and average costs will also decrease. This mechanism ultimately creates a self-correcting cycle, restoring market balance.
In recent weeks, the crypto market experienced intense volatility, with Bitcoin temporarily falling below the breakeven point related to miner production costs. Market sentiment was clearly affected, and on-chain activity also cooled. However, JPMorgan observed that despite retail participation waning, institutional interest remains relatively steady. Although market volatility remains high, if capital flows shift back into cryptocurrencies, the market could rebound.
The report also mentioned the relative performance of assets. Since October last year, gold has significantly outperformed Bitcoin, but recent gold price volatility has surged. From a long-term asset allocation perspective, compared to gold, Bitcoin now appears more attractive.
Looking ahead, JPMorgan forecasts that digital asset capital inflows will rebound in 2026, mainly driven by institutional investors rather than retail traders or hoarding companies.
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