Bitcoin poised for rally as ETF shorts unwind, JPMorgan says

JPMorgan analysts have identified a potential shift in investor sentiment that could benefit Bitcoin. According to their research, short interest in BlackRock's iShares Bitcoin Trust (IBIT) remains near its yearly high, while short interest in SPDR Gold Shares ETF (GLD) is below its historical average.

This suggests that investors are still skeptical of Bitcoin, but JPMorgan believes this positioning could work in its favor if hedging demand falls. When investors close their ETF short positions, they need to buy back the shares they borrowed, creating additional buying pressure.

The bank also notes that both Bitcoin and gold ETFs attracted fresh inflows after the Federal Reserve's July meeting as investors returned to the so-called debasement trade. However, this trend has weakened since then due to higher inflation-adjusted bond yields and the Senate's failure to advance the CLARITY Act.

Gold has recovered more strongly from earlier ETF outflows, with JPMorgan estimating that gold ETFs have regained all of their 2026 outflows. In contrast, Bitcoin ETFs have only regained around half, leaving room for further recovery if demand improves.