Emre Yumlu 
U.S. financial giant JPMorgan predicts that crypto markets could experience a strong recovery in the second half of 2026. However, this optimistic scenario is contingent on one key condition: the U.S. Congress passing comprehensive market structure legislation by mid-year.
According to the JPMorgan analyst team, if the long-awaited regulatory clarity is achieved, institutional capital inflows could accelerate and market dynamics could strengthen significantly.
Bitcoin Dips Below Production Cost
This assessment comes at a time when market sentiment remains fragile. Bitcoin recently fell below its estimated production cost of around $77,000. Historically, this level has been considered a “soft floor” during downturns. However, the latest pullback has further reinforced the cautious atmosphere following the sharp correction in the last quarter of the previous year.
This picture suggests that a new bullish wave will only be possible with a strong catalyst.
Shift in Power from Retail to Institutional
According to JPMorgan’s base case, the next bull cycle will differ from previous retail-led rallies. Today, approximately 65% of large-scale Bitcoin transactions are executed by institutional investors.
Additionally, the significant decline in 30-day realized volatility on an annualized basis points to more balanced capital flows and reduced speculative fluctuations. In 2025, a record $130 billion flowed into digital asset products. The bank forecasts that this figure could increase even further in 2026 if regulatory clarity is achieved.
This capital is not expected to be limited to spot purchases alone; it is anticipated to extend into venture capital investments, mergers and acquisitions, as well as initial public offerings of crypto exchanges, payment companies, and blockchain infrastructure firms.
Determining Factor: Market Structure Legislation
At the center of the forecasts lies federal-level market structure reform. The Digital Asset Market Clarity Act introduced in the House of Representatives aims to assign primary oversight of digital commodity spot markets to the CFTC while preserving the SEC’s authority over investment contracts.
On the Senate side, the Responsible Financial Innovation Act proposes a more hybrid model. Under this framework, certain tokens would fall under CFTC oversight, while periodic reporting obligations to the SEC could continue in cases involving capital raising.
Previously introduced, the Financial Innovation and Technology for the 21st Century Act aimed to reduce jurisdictional confusion by defining categories such as “permitted payment stablecoins.”
In summary, according to JPMorgan, there is potential for a strong crypto rally in the second half of 2026; however, the realization of this scenario appears to depend on regulatory clarity emerging from Washington.
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