Wall Street investment bank JPMorgan (JPM) said the pace of capital invested in digital assets slowed sharply in the first quarter of 2026, with total inflows estimated at around $11 billion.
This implies an annual rate of around $44 billion, or about a third of the rate observed in 2025, according to the report released last week.
“Investor flows, whether retail or institutional, have been weak to negative since the start of the year, with the majority of digital asset flows in the first quarter of 2026 coming from bitcoin purchases by Strategy (MSTR) and concentrated financing of venture capital funds in cryptocurrencies,” wrote analysts led by Nikolaos Panigirtzoglou.
Crypto markets experienced a volatile and generally negative first quarter, with prices and market capitalization falling sharply in a context of declining risk. The total cryptocurrency market capitalization fell by around 20% during the period, while bitcoin lost around 23% and ether (ETH) fell by over 30%, recording one of the weakest first quarter performances in several years.
The selloff was driven by macroeconomic and geopolitical pressures, triggering liquidations and a general pullback in risk assets, with altcoins taking an even harder hit.
Despite the decline, prices stabilized towards the end of the quarter, with bitcoin consolidating near the $70,000 level as demand for ETFs improved and some market segments, such as some select altcoins and onchain activity, showed significant growth. resilience.
The bank’s estimate aggregates crypto fund flows, Chicago Mercantile Exchange (CME) futures positions, venture capital fundraising and corporate treasury activity, including bitcoin purchases by companies such as Strategy.
Analysts said investor-driven flows were notably weak. Positioning on CME bitcoin and ether futures contracts has softened compared to 2024 and 2025, suggesting that institutional demand may be slightly negative year-to-date. Bitcoin and ether spot exchange-traded funds (ETFs) also saw net outflows during the quarter, concentrated in January, before a modest rebound in inflows into bitcoin ETFs in March.
The bank’s analysts attributed most of the quarter’s inflows to corporate treasury activity and venture capital financing. The strategy has remained long-dominant, financing bitcoin purchases primarily through issuance of stock, while signaling a continued reliance on issuance of common and preferred stock to fund accumulation. Other corporate holders have taken a more defensive stance, with some selling bitcoin to fund share buybacks.
Bitcoin miners were net sellers during the quarter, the report said, as companies sold holdings or used them as collateral to shore up liquidity, fund capital expenditures or manage liabilities. Analysts characterized the sale as a result of tighter financing conditions and strict balance sheet discipline rather than a distress situation.
Venture capital in cryptocurrency has been a relatively positive point. Financing followed a higher annualized rate than the previous two years, although activity was increasingly concentrated on a reduced number of larger operations led by established companies. Capital continued to shift to infrastructure, stablecoins, payments and tokenization, with less interest in gaming, non-fungible tokens (NFTs) and exchange-related projects, the report added.
Read more: Bitcoin holds strong as gold and silver retreat on ETF outflows and liquidity stress: JPMorgan
