The cryptocurrency market has faced significant turbulence recently, but a new survey indicates that institutional investors view this challenging environment as an opportunity. Per a recent report, a remarkable 70% of institutional investors believe Bitcoin is currently undervalued at its trading range of $85,000 to $95,000. This perspective appears to be unshaken by Bitcoin’s substantial drop of over 30% from its all-time high of $126,080 set last October.
This data emerges from a recent Coinbase survey included in their Q1 2026 report, conducted with 75 institutional investors and 73 independent investors between early December and early January. During the survey period, Bitcoin fluctuated predominantly between $85,000 and $95,000—a window where institutional confidence surged. Notably, 71% of the surveyed institutions deem Bitcoin undervalued, compared to 60% of independent investors sharing this sentiment. Only a minuscule 4% of institutional respondents believe Bitcoin is overvalued.
Bitcoin’s Market Struggles Compared to Traditional Assets
As of now, Bitcoin trades at approximately $87,600, which reflects a significant decline from its record highs. This slide began after a market crash on October 10 wreaked havoc, disposing of over $19 billion in leveraged positions within a single day. With crypto struggling to regain momentum, traditional assets like gold have thrived in contrast. Gold recently soared to unprecedented heights, exceeding $5,000, while silver has impressively doubled in value since October.
Further complicating the landscape are the ramifications of geopolitical tensions, including tariff threats and conflicts affecting energy markets. These conditions have understandably clouded investor sentiment, with Coinbase cautioning that such fallout may continue to influence market perceptions and confidence.
Long-Term Institutional Commitment
Amid the volatility, institutional investors are displaying remarkable resilience. The survey reveals that 80% of institutional investors are inclined to either hold their current crypto positions or increase their purchases should prices decline by an additional 10%. This statistic highlights a robust long-term confidence in the asset class, as over 60% of institutional investors have maintained or expanded their crypto holdings since the aforementioned high.
Significantly, while independent investors exhibited a less favorable outlook, the divide in sentiment between institutions and retail investors underscores a prevailing water of optimism among seasoned professionals in the space. Most institutional investors perceive the market’s current state as either an accumulation phase or part of a bear market—a viewpoint that aligns with strategies aiming to bolster positions during downturns.
Potential Support from Federal Reserve Policies
Looking ahead, there is room for optimism as Coinbase anticipates the Federal Reserve to implement two interest rate cuts within 2026. Historically, such cuts are favorable for riskier assets like cryptocurrencies, as reduced borrowing costs naturally entice higher investment in these markets.
Alongside these developments, general economic indicators are presenting a more stable outlook, with consumer inflation holding steady at 2.7% in December and real GDP growth surpassing 5% in the last quarter. Coinbase lauds these economic conditions as promising for the future of crypto, contingent upon continued monitoring of monetary policy changes based on evolving economic metrics.
In conclusion, institutional confidence amid cryptocurrency’s market challenges reaffirms a significant belief in Bitcoin’s undervalued status, as these seasoned investors strategically position themselves for potential gains when the market stabilizes.
