According to Wall Street investment bank JPMorgan (JPM), capital inflows into digital assets have significantly decelerated during the first quarter of 2026, amounting to approximately $11 billion. This translates to an annualized run rate near $44 billion—a stark contrast to the previous year’s pace, which was nearly three times higher, as detailed in a recent report.
Analysts led by Nikolaos Panigirtzoglou noted that both retail and institutional investor flows were minimal or even negative for the year to date. The predominant contributor to digital asset inflows in Q1 2026 came from Strategy’s (MSTR) bitcoin purchases along with concentrated crypto venture capital funding.
The first quarter saw a turbulent and predominantly negative performance across crypto markets, with prices and overall market value experiencing significant declines due to a risk-averse climate. Crypto market capitalization decreased by about 20%, while bitcoin fell approximately 23% and ether (ETH) dropped over 30%, marking one of the weakest quarterly performances in recent years.
Geopolitical tensions and macroeconomic pressures spurred liquidations, contributing to a broad retreat across various risk assets, with altcoins experiencing even steeper declines. Despite these challenges, prices began stabilizing towards the quarter’s end; bitcoin hovered around the $70,000 mark as demand for ETFs picked up slightly, while certain market segments like select altcoins and on-chain activities demonstrated resilience.
JPMorgan’s estimate encompasses crypto fund flows, CME futures positioning, venture capital fundraising, and corporate treasury transactions, including Strategy’s bitcoin purchases. The analysts observed that investor-driven inflows were particularly weak, with reduced positioning in bitcoin and ether CME futures compared to the previous two years, indicating a possible shift towards negative institutional demand year-to-date. Spot bitcoin and ether ETFs also experienced net outflows during this period, primarily in January, before witnessing a slight rebound in bitcoin ETF inflows by March.
The report attributed most of the quarter’s inflows to corporate treasury activities and venture funding. Strategy emerged as the leading buyer, largely financing its bitcoin acquisitions through equity issuance while indicating continued reliance on stock and preferred issuance for accumulation purposes. In contrast, other corporate holders adopted a more defensive stance, with some opting to sell bitcoin to support buybacks.
Bitcoin miners were net sellers during this period, selling holdings or using them as collateral to improve liquidity, fund capital expenditures, or manage liabilities. This trend was driven by tighter financing conditions and balance sheet discipline rather than distress signals, according to the analysts.
A notable highlight in the report was crypto venture capital, which maintained an annualized funding pace exceeding that of the previous two years, though it became increasingly concentrated in fewer, larger deals led by established firms. Investment focus shifted towards infrastructure, stablecoins, payments, and tokenization, with less interest shown in gaming, NFTs, and exchange-related projects.