JPMorgan Sees Bitcoin Outperforming Gold on Hedge Position Resolution

JPMorgan analysts led by Nikolaos Panigirtzoglou believe that Bitcoin could outperform gold if high hedge positions in Bitcoin ETFs are resolved. In a recent report, they noted that inflows into Bitcoin and gold ETFs accelerated after the Fed meeting at the end of July.

The analysts stated that hedging against currency depreciation came to the forefront again, but the rise in real bond yields in the last week and the US Senate's failure to advance the Clarity Act have weakened this trend. Gold ETFs have recouped all their losses from earlier in the year, while Bitcoin ETFs have only managed to recover about half of their previous outflows.

JPMorgan analysts believe that demand for gold ETFs has recovered more strongly than for Bitcoin ETFs, but there could be room for recovery if positive news flow returns. They noted that positioning in both Bitcoin and gold futures remains at high levels, indicating institutional investors continue to support both assets.