JPMorgan Bets on 2026 Cryptocurrency Super Year! $130 Billion Institutional Surge Hits Again

Morgan Chase predicts that in 2026, crypto inflows will surpass the record high of 2025’s 130 billion USD, with increased institutional participation. The passage of the Clarity Act could trigger institutional adoption. In 2025, DAT contributed 68 billion USD (MicroStrategy 23 billion + others 45 billion). Retail-led ETF flows dominate, while CME institutional activity slows down. The Q4 de-risking trend shows signs of stabilization.

Dissecting the 130 Billion USD Inflow Structure and the Retail Dominance Myth

(Source: Messari, Bloomberg, Morgan Chase)

Morgan Chase analysts estimate overall capital flows into cryptocurrencies by summarizing ETF fund movements, implied fund flows from CME futures, crypto venture capital fundraising, and purchases by the Digital Asset Treasury (DAT). This multi-dimensional statistical approach provides a more comprehensive market picture than single indicators.

Growth in 2025 is mainly driven by Bitcoin and Ethereum ETF inflows, which analysts believe are likely retail-led. Additionally, DAT companies outside MicroStrategy also bought Bitcoin. In contrast, implied buy volume for CME Bitcoin and Ethereum futures significantly slowed compared to 2024, indicating decreased participation from institutional investors and hedge funds.

Analysts forecast that in 2025, over half of the total digital asset inflow (about 68 billion USD) will come from DAT. MicroStrategy’s purchases amount to approximately 23 billion USD, close to the 22 billion USD in Bitcoin bought in 2024. They also note that other DATs purchased digital assets totaling around 45 billion USD in 2025, a substantial increase from 8 billion USD the previous year. This surge from 8 billion to 45 billion USD (a 463% increase) indicates that more companies are including Bitcoin on their balance sheets.

Four Major Sources of the 130 Billion USD Inflow in 2025

ETF Flows: Retail-led, Bitcoin and Ethereum spot ETFs are the main drivers

DAT Purchases: 68 billion USD, MicroStrategy 23 billion + other DATs 45 billion

CME Futures Implied: Institutional and hedge fund participation declines, buy volume slows

Crypto Venture Capital: Still far below the peaks of 2021-2022, squeezed by DAT

However, analysts note that most of these DAT purchases occurred earlier this year. Since October last year, DAT buying activity has slowed significantly, including large holders like MicroStrategy and BitMine. This slowdown in the second half of the year raises questions about whether inflows can continue into 2026. If DAT purchases remain subdued, ETF and other channels will need to fill the gap to meet growth expectations.

Crypto venture capital remains an important contributor to overall capital flows, though its scale is still well below the peaks of 2021 and 2022. While total VC funding in 2025 shows slight growth over 2024, deal volume has sharply declined, with investment activity concentrating more on later-stage rounds. Early-stage funding has notably slowed this year. Analysts highlight that, given the relatively lenient US regulatory environment, the sluggish growth in venture capital is particularly noteworthy.

Clarity Act as Catalyst and the 2026 Institutional Adoption Logic

Morgan Chase analysts reported on Wednesday: “We expect that the rebound in institutional capital inflows in 2026 may benefit from the passage of more crypto regulation laws, such as the U.S. Clarity Act, which could further stimulate institutional adoption of digital assets, as well as new institutional activities around crypto venture capital, M&A, and IPOs. These include stablecoin issuers, payment companies, exchanges, wallet providers, blockchain infrastructure, and custody solutions.”

The Clarity Act is a key legislation in US crypto regulation, aiming to provide a clear legal framework for digital assets, distinguishing which assets are securities, commodities, or other categories. Regulatory clarity is a prerequisite for institutional investment. In an environment of regulatory ambiguity, compliance departments and legal teams tend to block crypto investments due to unquantifiable legal risks. Once the Clarity Act takes effect, institutions will have a “safe harbor,” knowing how to legally allocate crypto assets.

Morgan Chase expects that institutional activity will not be limited to direct Bitcoin purchases. M&A and IPO activities in areas like stablecoin issuers (e.g., Circle planning IPO), payment companies (e.g., Stripe acquiring Bridge), exchanges (e.g., Kraken planning to go public), and custody solutions will bring new institutional capital into the crypto market. This shift from “buying coins” to “buying stocks” expands the scope of crypto assets.

The analysts add that the total digital assets purchased by other DATs in 2025 was about 45 billion USD, a significant increase from 8 billion USD the previous year. This DAT boom peaked in the first half of 2025 but slowed markedly since October. If 2026 sees no recovery in DAT purchases, institutional investors will need to fill the gap. Morgan Chase’s optimistic outlook is based on the assumption that clearer regulation via the Clarity Act will unlock previously hesitant institutional funds.

However, this assumption carries risks. Even if the Clarity Act passes, institutional investment decisions will still take time. Large pension funds, insurance companies, and sovereign wealth funds have lengthy investment processes, and it may take 6 to 12 months from policy approval to actual deployment. Therefore, even with regulatory clarity in early 2026, large-scale institutional inflows might only materialize in the second half of the year or even in 2027.

Turning Point: Q4 De-risking Trend Slowing

Last week, analysts indicated that the de-risking trend in crypto appears to be slowing, with stable ETF fund flows and other indicators showing signs of stabilization. They added, “The previous trend of retail and institutional investors sharply reducing crypto positions in Q4 2025 may be over.” The slowdown in de-risking is a key reason Morgan Chase remains optimistic about 2026.

The large sell-off in Q4 2025 reflected panic reactions to the October liquidation event. After market volatility, investors instinctively reduced risk exposure, selling high-volatility assets. But as markets gradually stabilized in December and January 2026, this panic selling ceased, and capital outflows turned into stabilization or slight inflows. This shift from “net outflows” to “stability” often signals an early stage of a bull market recovery.

Looking ahead, analysts expect crypto inflows in 2026 to further increase, driven more by institutional investors than retail or DAT. The logic is: retail investors already entered en masse via ETFs in 2025, leaving limited room for further growth; DAT, after a frenzy of buying in 2025, needs to digest and consolidate; and institutional funds, previously hesitant due to regulatory uncertainty, will be released once laws like the Clarity Act are enacted.

However, Morgan Chase’s forecast faces challenges. If Bitcoin prices remain subdued in the first half of 2026, institutions may choose to wait rather than invest. If the global macro environment worsens (e.g., recession or geopolitical escalation), institutional risk appetite could decline further. Therefore, Morgan Chase’s optimistic outlook is based on multiple assumptions: regulatory clarity, macroeconomic stability, and price recovery.