JPMorgan says Bitcoin and gold ETF outflows signal cooling demand for inflation and debasement hedges.
Bitcoin News
Investors have pulled money from both Bitcoin (BTC) and gold exchange-traded funds (ETFs) over the past two weeks, and JPMorgan analysts say the pattern reflects a cooling of the so-called debasement trade. The analysis was published May 28 by a team led by managing director Nikolaos Panigirtzoglou.
The debasement trade refers to buying assets like BTC and gold as protection against inflation, geopolitical instability, and fiat currency weakness. Bitcoin had become one of the main vehicles for this trade following the start of the US-Iran conflict earlier this year, with Bitcoin ETFs drawing consistent inflows while gold ETFs struggled to recover earlier losses.
Bitcoin ETFs have seen steeper outflows than gold ETFs over the same period. The JPMorgan analysts said the data looks more consistent with a broad retreat from the debasement trade than with investors rotating out of Bitcoin and into gold. They linked the shift to investor expectations around a potential Iran-US deal.
Institutional Positioning Also Eases
The same pattern appeared in futures markets. Institutional investors appear to have trimmed exposure to both Bitcoin and gold over the past two weeks. BTC futures saw a sharper pullback because Bitcoin had become a more concentrated expression of the debasement trade since the conflict began, the analysts noted.
JPMorgan's momentum signal framework flagged softening positioning from momentum-driven traders, including commodity trading advisors (CTAs). The analysts said positioning from that group lost momentum in both Bitcoin and gold over the past one to two weeks. The trend reinforced the view that a broader cooling is underway across both #assets.
The outflow figures reflect the shift. BlackRock's IBIT Bitcoin ETF recorded $527.8 million in outflows on May 28, its second-largest single-day redemption since launch. US spot Bitcoin ETF products collectively saw $733.4 million in net outflows on the same day, the largest daily total since Jan. 29, according to SoSoValue data.
Bitcoin was trading at around $72,750 on May 28, down nearly 3% over the prior 24 hours.
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