JPMorgan said the crypto selloff showed signs of stabilizing in January 2026 as Bitcoin and Ethereum ETF outflows eased after heavy withdrawals in December 2025. The bank tied the December drawdown to roughly $4 billion of ETF outflows that it attributed largely to retail investors.
JPMorgan added that the moderation in ETF selling pressure has improved the market’s near-term setup. With redemptions cooling, the gap narrows versus steadier institutional flows, supporting the view that downside may be limited for now.
Retail exits vs institutional stickiness
JPMorgan’s read is that the correction was driven primarily by retail ETF behavior rather than broad institutional capitulation. The bank described institutional products as showing limited liquidations while retail investors drove substantial December redemptions. It also noted that crypto-native traders amplified volatility through leveraged positions executed on offshore platforms, outside the institutional ETF channel.
That split created an unstable flow mix into year-end and a cleaner one as January began. JPMorgan framed the key dynamic as a divergence between retail outflows and continued institutional demand, with easing January outflows reducing immediate sell pressure. In that context, the market looks less mechanically forced and more capable of absorbing volatility without cascading liquidation.
JPMorgan kept a constructive long-term stance on Bitcoin even while acknowledging the short-term drawdown. The bank projected Bitcoin could reach around $170,000 by 2026 and set a longer-term target near $240,000, while also flagging a potential production-cost floor around $94,000. Those reference points underpin its argument that the pullback may have approached a lower boundary for the current cycle.
JPMorgan’s operational push into crypto
The bank’s view is paired with concrete efforts to build institutional rails into the sector. JPMorgan has explored accepting crypto ETFs as collateral for loans, developed a deposit token (JPMD) on the Coinbase blockchain, and participated in tokenization efforts on platforms such as Solana. It has also considered expanding into institutional crypto trading services, including spot and derivatives, signaling deeper product integration beyond research and flow commentary.
Looking ahead, the immediate scoreboard is straightforward. Market participants will watch whether ETF outflows keep abating and whether JPMorgan’s operational initiatives translate into steadier institutional flows. If both persist, it strengthens the case that the selloff has at least partially bottomed; if retail-driven redemptions reaccelerate, volatility risk likely re-enters the frame.