Debasement Trade Cools as Bitcoin and Gold ETF Outflows Surge

JPMorgan analysts have identified a shift in investor behavior, pointing to a cooling of the debasement trade. This trade involves buying assets like BTC and gold as protection against inflation, geopolitical instability, and fiat currency weakness.

Data from the past two weeks shows that investors have pulled money from both Bitcoin (BTC) and gold exchange-traded funds (ETFs). Bitcoin ETFs have seen steeper outflows than gold ETFs over the same period. JPMorgan analysts linked this shift to investor expectations around a potential Iran-US deal.

The same pattern appeared in futures markets, where institutional investors appear to have trimmed exposure to both BTC and gold over the past two weeks. Momentum signal framework flagged softening positioning from momentum-driven traders, including commodity trading advisors (CTAs).