Bitcoin and gold are losing their appeal as macro hedges, JPMorgan says, as Middle East tensions and inflation fears ease and investors pull money from “devaluation trades.”
Summary
- JPMorgan says investors are exiting Bitcoin and gold “devaluation trades” as macro fears cool
- Bitcoin and gold ETFs have seen notable outflows alongside weaker CME futures positioning
- The shift follows months of inflows into Bitcoin ETFs during the Iran conflict-driven macro hedge trade
Bitcoin’s (BTC) role as the market’s flagship “devaluation trade” is fading as investors unwind macro hedges built during the Iran conflict and peak inflation anxiety, according to a new note from JPMorgan analysts led by Nikolaos Panigirtzoglou.
The bank told clients that, as signs of easing tensions in the Middle East emerge and inflation fears moderate, flows into both Bitcoin and gold have reversed, with exchange traded funds tracking the two assets suffering “significant capital outflows” over the past two weeks and institutional positioning in CME futures weakening in tandem.
Bitcoin’s devaluation trade loses steam
JPMorgan framed the shift not as a rotation trade but as a broad retreat from safe-haven hedges that previously benefited from worries over currency debasement and geopolitical instability, stressing that “it is not a case of Bitcoin funds shifting to gold; rather, both asset classes are facing a simultaneous decline in demand.”
That marks a sharp turn from earlier this month, when the bank argued that Bitcoin was “taking market share from gold” as a hedge against fiat debasement, with spot Bitcoin ETFs recording three straight months of inflows while gold products remained below pre-March assets under management levels.
From inflow frenzy to ETF outflows
During the height of the Iran conflict, JPMorgan analysts described Bitcoin as the leading expression of the “debasement trade,” a catch-all label for strategies that pile into assets seen as protection against monetary dilution, structurally high debt, and geopolitical shocks.
In that phase, Bitcoin ETFs were absorbing billions in fresh capital, contributing to an eight day $2.1 billion inflow streak in U.S. spot products through April 23 as the asset climbed from around $68,000 to $77,000, with BlackRock’s IBIT capturing roughly 75% of the flows.
That momentum has reversed into outflows as risk appetite normalizes.
Just last week, U.S. spot Bitcoin ETFs logged $648.6 million in net outflows in a single day, their largest withdrawal since January, while Bitcoin slipped below $77,000 amid a reset in expectations around inflation and the trajectory of U.S.–Iran tensions.
The latest JPMorgan note suggests that the same macro drivers that powered Bitcoin’s ascent to six figures and pushed gold to a record above $4,000 per ounce in the broader “debasement trade” are now receding, at least temporarily.
That echoes prior analysis in which the bank argued that capital had been flowing into Bitcoin and gold in parallel as investors sought refuge from a weakening dollar and eroding faith in policy credibility, a dynamic also explored in recent coverage of the joint Bitcoin and gold rally on the “debasement trade.”
Even as the hedge narrative cools, Bitcoin remains tightly tethered to ETF flows and macro sentiment, a pattern highlighted in recent reporting on streaks of ETF inflows and outflows and their mechanical impact on price direction.
In previous crypto.news coverage of Bitcoin’s ETF driven rallies and macro shocks — from the Iran conflict spillover in oil linked Bitcoin moves to the multi day ETF inflow surges and sharp outflow episodes — the asset has repeatedly behaved less like digital gold and more like a levered bet on the persistence of the debasement trade.
If the current cooling in inflation anxiety and Middle East risk holds, JPMorgan’s latest call implies that both Bitcoin and gold may need a new narrative and fresh capital sources to reclaim their recent highs.
For now, the “devaluation trade” that once pulled money into both assets in lockstep appears to be in retreat, leaving Bitcoin exposed to any further moderation in the macro panic that helped push it there in the first place.
You can track live market data for Bitcoin, Ethereum, and gold token proxies such as PAX Gold directly via crypto.news price pages as the devaluation trade resets.
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