JPMorgan: Resolved Hedge Positions Could Fuel Bitcoin's Outperformance

JPMorgan analysts have released a report that suggests Bitcoin could outperform gold under one condition. According to the report, if high hedge positions in Bitcoin ETFs are resolved, Bitcoin may find stronger support than gold.

The report notes that inflows into Bitcoin and gold ETFs accelerated following the Fed meeting at the end of July. However, 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.

Demand for gold ETFs has recovered more strongly than for Bitcoin ETFs. Gold ETFs have recouped all their losses from earlier in the year, while Bitcoin ETFs have only managed to recover about half of their previous outflows.

The report states that positioning in both Bitcoin and gold futures remains at high levels, indicating that institutional investors continue to support both assets. However, the real difference between the two assets emerges in short positions in ETFs. The ratio of short positions in BlackRock's iShares Bitcoin Trust ETF (IBIT) is near its highest levels seen this year, while short positions in the SPDR Gold Shares ETF (GLD) are below the historical average.