JPMorgan notes outflows from bitcoin and gold ETFs alongside reduced futures positions amid cooling inflation concerns and geopolitical easing.
Investors are pulling back from bitcoin and gold, signaling a decline in the so-called ‘debasement trade’ as inflation fears ease and Middle East tensions show signs of de-escalation. Outflows from bitcoin and gold ETFs over the past two weeks, coupled with reduced institutional futures positions, reflect a broader retreat from macro hedges popularized earlier this year.
The shift follows a period of heightened demand for both assets, driven by inflation concerns and geopolitical instability. Data shows bitcoin ETFs saw significant outflows, mirroring trends in gold ETFs, while CME futures positions for both assets weakened. Analysts suggest the move is not a rotation between the two but a simultaneous pullback.
The report links the trend to potential progress in U.S.-Iran negotiations, which may reduce demand for safe-haven assets. Bitcoin had been a key beneficiary of the ‘debasement trade’ since the onset of regional conflicts.