JPMorgan analysts believe that if the high hedge positions in Bitcoin ETFs are resolved, Bitcoin could find stronger support than gold in the coming period.
A report published by JPMorgan analysts led by Nikolaos Panigirtzoglou stated that inflows into Bitcoin and gold ETFs accelerated following the Fed meeting at the end of July, and that hedging against currency depreciation came to the forefront again. However, according to the analysts, the rise in real bond yields in the last week and the US Senate’s failure to advance the Clarity Act have weakened this trend.
The report noted that demand for gold ETFs has recovered more strongly than for Bitcoin ETFs. Gold ETFs have recouped all of their losses from earlier in the year, while Bitcoin ETFs have only managed to recover about half of their previous outflows. The recent slowdown in inflows into Bitcoin ETFs could leave more room for recovery if positive news flow returns.
According to JPMorgan, the fact that positioning in both Bitcoin and gold futures remains at high levels indicates that institutional investors continue to support both assets. However, the real difference between the two assets emerges in short positions in ETFs.
Analysts noted that the ratio of short positions in BlackRock’s iShares Bitcoin Trust ETF (IBIT) remains near its highest levels seen this year. In contrast, short positions in the SPDR Gold Shares ETF (GLD) were recorded as being below the historical average.
JPMorgan stated that this difference indicates a more cautious investor positioning in Bitcoin compared to gold, which could stem from higher hedging demand in Bitcoin. The fact that the put/call open position ratio in IBIT is also higher than in GLD suggests, according to analysts, a greater concentration of hedging positions around Bitcoin.
Bank analysts added that there are other factors that could influence the price movements of Bitcoin and gold, noting that short positions in IBIT, which are currently higher than in GLD, represent significant potential. According to JPMorgan, if investors reduce their demand for hedging, the unwinding of these positions could provide more support to Bitcoin than to gold.
*This is not investment advice.
