Cryptocurrency investment products recorded a record $130 billion in fund inflows in 2025, and flows are expected to increase further in 2026, driven largely by institutional participation, according to analysts at JPMorgan.
In a report cited by The Block, JPMorgan said growing regulatory clarity — particularly in the United States — is likely to support the next phase of capital inflows into digital assets, extending beyond ETFs into venture capital, mergers and acquisitions, and public listings across the crypto sector.
Regulatory clarity seen as key catalyst
JPMorgan analysts highlighted that the rollout of additional crypto regulations, including the proposed U.S. CLARITY Act, could significantly boost institutional confidence. Clearer rules are expected to encourage deeper participation across:
Crypto and stablecoin investment funds
Venture capital and early-stage financing
M&A activity involving exchanges, payment firms and infrastructure providers
Potential IPOs from stablecoin issuers and crypto-native financial companies
The bank noted that regulation is increasingly being viewed not as a constraint, but as an enabler of large-scale institutional adoption.
ETFs dominated 2025 inflows, but momentum is shifting
According to the report, Bitcoin and Ethereum ETFs accounted for the bulk of 2025’s inflows, with demand likely skewed toward retail investors in the early stages. Additional support came from digital asset treasury companies outside of Strategy, which added crypto to their balance sheets throughout much of the year.
However, JPMorgan observed a clear slowdown in treasury company purchases starting in October 2025, suggesting that this source of demand may play a smaller role going forward compared with regulated investment vehicles and institutions.
Venture capital activity shows mixed signals
While overall crypto venture capital investment rose modestly in 2025, the report noted a sharp decline in the number of deals, pointing to increased caution among investors. Early-stage funding activity slowed significantly, indicating a more selective environment focused on mature projects with clearer regulatory and revenue visibility.
Despite this, JPMorgan expects institutional inflows to remain resilient in 2026 as capital reallocates toward regulated products, large-cap digital assets, and infrastructure plays tied to payments and stablecoins.
Outlook: institutional-led growth in 2026
JPMorgan concluded that the crypto market is entering a new phase where institutions — not retail speculation — will be the primary driver of capital inflows. With regulation improving and market infrastructure maturing, the bank sees conditions aligning for sustained growth in crypto fund inflows this year.
