Why Institutional Investors Are Calling Bitcoin Undervalued Right Now

TLDR

• 70% of institutional investors believe Bitcoin is undervalued at its current price range of $85,000 to $95,000, according to a Coinbase survey
• Bitcoin has dropped over 30% from its $126,080 all-time high in October, while gold hit $5,000 and silver doubled in value
• 80% of institutional investors plan to hold or buy more crypto if prices fall another 10%
• Coinbase surveyed 75 institutional and 73 independent investors between early December and early January
• More than 60% of institutional investors have held or increased their crypto positions since October

Bitcoin’s price struggles have not shaken institutional confidence, with most large investors viewing the current market as a buying opportunity. A new survey reveals strong conviction among professional investors despite crypto’s recent underperformance.

Coinbase released its Charting Crypto Q1 2026 report based on surveys of 75 institutional investors and 73 independent investors. The survey period ran from early December to early January. During this time, Bitcoin traded mostly between $85,000 and $95,000.

The results showed 71% of institutional investors believe Bitcoin is undervalued at current prices. Among independent investors, 60% share this view. Only 4% of institutional investors said Bitcoin is overvalued, while 25% consider it fairly priced.

Bitcoin Performance Lags Behind Traditional Assets

Bitcoin currently trades at $87,600, down more than 30% from its October all-time high of $126,080. The decline began after a major market crash on October 10 that wiped out over $19 billion in leveraged positions. Crypto prices have struggled to recover since then.

Traditional safe haven assets have performed much better during the same period. Gold reached a record high above $5,000 on Monday. Silver has doubled in market value since October. The S&P 500 stock index has gained a modest 3%.

Market conditions have remained challenging for crypto investors. Tariff threats from the Trump administration and tensions between the US and Middle East have weighed on sentiment. Coinbase warned that geopolitical tensions could continue to impact investor confidence.

The report noted that disruptions to energy markets could hurt crypto prices further. Despite these headwinds, institutional investors remain committed to their positions.

Institutions Plan to Hold or Buy More

The survey found 80% of institutional investors would either hold their positions or buy more crypto if prices fell another 10%. This response suggests long-term confidence in the asset class. More than 60% of institutional investors have already held or increased their crypto holdings since October.

Independent investors showed less conviction than institutions. The survey results indicate a gap between professional and retail investor sentiment. Institutional investors appear more willing to view price drops as buying opportunities.

Looking at market cycle positioning, 54% of institutional investors view the current environment as either an accumulation phase or a bear market. This perspective aligns with their strategy to hold or add to positions during weakness.

Federal Reserve Rate Cuts Could Support Crypto

Coinbase expects the Federal Reserve to cut interest rates twice in 2026. Rate cuts typically benefit risk assets like crypto by making borrowing cheaper. Lower rates can also push investors toward higher-return assets.

The broader economy shows signs of stability that could support crypto markets. Consumer inflation held steady at 2.7% in December. Real GDP grew at over 5% in the fourth quarter.

Coinbase described the economy as being on solid footing. These economic conditions could create a better environment for crypto if they continue. However, monetary policy remains uncertain and could change based on economic data.

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