Bitcoin Defensive Positioning May Ultimately Drive Gains Against Gold

JPMorgan analysts are warning that Bitcoin's current defensive positioning could eventually work in its favor if sentiment improves and demand for protection fades.

The Wall Street banking giant notes a significant difference between investor positioning in Bitcoin and gold exchange-traded funds (ETFs).

Inflows into gold ETFs have already compensated for all outflows recorded earlier this year, while Bitcoin ETF inflows have only recovered roughly half of their previous outflows.

JPMorgan analysts believe that the unusually defensive positioning surrounding Bitcoin could eventually lead to an increase in the cryptocurrency's value relative to gold if investors become more confident and start removing hedges.