"Cryptocurrency is booming and prosperous" JPMorgan: Institutional funds will become the new main attraction in 2026

According to the latest analysis report from JPMorgan, the cryptocurrency market is expected to perform exceptionally well in 2025. JPMorgan analysts point out that after attracting nearly $130 billion in capital inflows and reaching a record high in 2025, the fundraising scale in 2026 still has room for further expansion. However, the driving force behind this market boom will undergo a significant shift—from being dominated by retail investors and business owners to being led by “institutional investors.”

Led by JPMorgan Managing Director Nikolaos Panigirtzoglou, the analysis team emphasized in their recent report that the capital inflow this year surged by approximately one-third compared to 2024. Under this bullish market sentiment, with regulatory environments becoming clearer next year, institutional buying is expected to return to the market, becoming the core force driving a new wave of capital.

2025 Capital Frenzy Recap: Retail, Businesses, and Institutions Each Play Their Role

JPMorgan compiled data from ETF capital flows, CME futures data, venture capital financing, and corporate purchases to outline a comprehensive picture of capital movements over the past year.

On the retail side, the inflow of funds into Bitcoin and Ethereum spot ETFs in 2025 was primarily driven by retail investors. However, regarding institutions, CME futures data—representing the activities of professional institutions and hedge funds—showed that institutional buying interest was less enthusiastic than in 2024. This indicates that traditional financial institutions operated relatively conservatively last year and have not fully entered the market.

Most notably, there was a surge in corporate coin-hoarding. Over half of the capital inflow in 2025 (about $68 billion) came from corporate purchases, forming a significant support for market growth. Among them, publicly listed coin-hoarding companies like MicroStrategy contributed approximately $23 billion, roughly the same as in 2024; besides these, digital asset reserve companies (DATs) purchased cryptocurrencies totaling about $45 billion, a explosive growth compared to $8 billion the previous year.

Why Were Institutional Funds Absent in 2025?

It is worth noting that despite the improved regulatory environment in the U.S., the venture capital (VC) market for cryptocurrencies in 2025 did not perform as well as expected. The reason is that funds that should have been invested in startups instead flowed into DAT companies that offer “immediate liquidity.” Many venture capitalists even chose to directly participate in financing for listed mining companies or coin-hoarding firms. This phenomenon reflects a pursuit of “certainty of returns” rather than long-term innovation.

Analysts say that this misallocation of funds is the main reason for the relative absence of institutions in 2025. Institutional investors are waiting—waiting for clearer policy signals and a more mature market environment.

Regulatory Clarification Will Drive Institutions to Lead, Expect a New Wave in 2026

Looking ahead to 2026, JPMorgan expects capital inflows into the cryptocurrency market to continue growing. However, the driving force is likely to be led by institutional investors rather than retail investors or DAT companies. The key catalyst for this shift is the implementation of more cryptocurrency regulatory laws, with the “Digital Asset Market Clarity Act” being viewed as an important trigger.

JPMorgan believes that once this law passes, it will trigger a new wave of institutional adoption and stimulate activities such as venture capital, mergers and acquisitions (M&A), and initial public offerings (IPOs) in the crypto space. This means that the institutional funds that held a wait-and-see attitude in 2025 will enter the market en masse once the rules are clarified, further boosting the bullish market outlook.

The analysts added that in Q4 2025, both retail and institutional investors should have largely completed their previous position reductions. This lays a foundation for new capital inflows in 2026. The market is gradually shifting from being solely driven by retail investors to a more diversified, resonant capital environment.