Bitcoin Seen Outperforming Gold Amid Stalled Hedging Demand
JPMorgan analysts predict that Bitcoin could outperform gold in the market if investors continue to unwind their ETF hedges. According to a recent report, the 'debasement trade' has stalled, with inflows into both Bitcoin and gold ETFs dissipating in the past week.
The Federal Reserve's decision to raise interest rates by 0.25% and the Senate's failure to pass the CLARITY Act have contributed to this trend. As a result, gold ETFs have seen more buying than Bitcoin, with gold regaining its year-to-date inflows while Bitcoin has only recovered about 50% of those losses.
However, JPMorgan analysts believe that Bitcoin still faces a skeptical positioning backdrop due to elevated hedging demand. The short interest in BlackRock's iShares Bitcoin Trust ETF (IBIT) remains high, with options positioning hinting at increasing hedging around Bitcoin.