A decrease in hedging demand for bitcoin ETFs may provide stronger support for the asset compared to gold, according to a report by JPMorgan.
Bank analysts noted that following the Federal Reserve meeting at the end of July, there was a simultaneous inflow of funds into cryptocurrency and precious metal funds.
They attributed this trend to the return of the debasement trade strategy. However, after the September interest rate hike in the U.S., this trend weakened.
JPMorgan cited rising inflation-adjusted bond yields and the failure of the CLARITY Act bill as reasons for this change.
According to the bank, gold ETFs have already recovered all outflows since the beginning of the year, while bitcoin products have compensated for about half of the losses.
In recent days, demand for crypto funds continues to decline. Analysts believe there is room for recovery if the news environment improves.
Positioning in the futures market for gold and bitcoin remains high. JPMorgan believes this indicates sustained support for both assets from institutional investors.
The key difference, according to the bank, lies in hedging through ETFs. Short interest in the BlackRock iShares Bitcoin Trust ETF (IBIT) remains near year-to-date highs, while the largest gold fund, SPDR Gold Shares ETF (GLD), is below its historical average.
The ratio of open interest in put and call options for IBIT is also higher than for GLD.
“This contrast suggests that bitcoin still faces more market skepticism than gold, possibly due to higher hedging demand despite recent fund inflows and increased positions in futures markets,” JPMorgan stated.
Earlier, on September 14, CryptoQuant identified a signal indicating the end of bitcoin’s bearish phase.
