Bitcoin May Outshine Gold as Hedging Demand Ebbs

JPMorgan analysts, led by Nikolaos Panigirtzoglou, have made an interesting observation about the relationship between Bitcoin and gold. They note that if ETF hedging demand declines, Bitcoin could receive more relative support than gold.

Both Bitcoin and gold ETFs have seen inflows since late July, but gold ETFs have recovered all of their earlier 2026 outflows, while Bitcoin ETFs have only recovered about half. This suggests that investors are taking a cautious approach to both assets, but JPMorgan believes that the dynamics could shift in favor of Bitcoin if hedging demand decreases.

The analysts point out that the short interest in BlackRock's IBIT is near its highest level this year, while the short interest in the GLD Gold Shares ETF is below its historical average. This positioning difference highlights the contrasting views on these two assets.