Bitcoin's Positioning Could Provide Support Amid Weakening Demand
JPMorgan analysts say Bitcoin's positioning could work in its favor if investors unwind bearish positions in spot exchange-traded funds (ETFs). The bank notes that short interest in the BlackRock iShares Bitcoin Trust (IBIT) remains near its yearly high, while short interest in the SPDR Gold Shares ETF (GLD) is below its historical average.
The put-to-call open interest ratio for IBIT is also higher than that of GLD, indicating heavier demand for downside protection around Bitcoin. JPMorgan believes this positioning could lead to additional buying pressure if hedging demand falls.
In July, both Bitcoin and gold ETFs attracted fresh inflows after the Federal Reserve's meeting as investors returned to the debasement trade. However, since then, higher inflation-adjusted bond yields and the Senate's failure to advance the CLARITY Act have weighed on Bitcoin demand.