JPMorgan: Bitcoin Outpaces Gold as Debasement Hedge

A JPMorgan report led by managing director Nikolaos Panigirtzoglou found that bitcoin has overtaken gold as the preferred hedge against currency debasement since the Iran conflict began. Bitcoin exchange-traded funds recorded inflows for a third consecutive month in May, while gold ETFs have not recovered the assets that left the market in March.

The report attributes the shift to growing retail demand for bitcoin through ETFs and rising institutional exposure. Positioning proxies based on CME bitcoin futures and offshore perpetual futures reached new highs, which JPMorgan interprets as increased institutional participation. Momentum indicators used by momentum-focused traders have also strengthened for bitcoin since the conflict started.

JPMorgan highlighted that some accumulation of bitcoin is happening indirectly via large corporate holders. MicroStrategy remains the largest corporate holder and has accelerated purchases this year. The bank estimated that if MicroStrategy keeps its current pace, its buying could total roughly $30 billion over the year. The report also noted MicroStrategy’s shareholder base is roughly split between retail and institutional investors.

The analysts identified March as the turning point, when outflows from gold ETFs coincided with increased interest in bitcoin. The report explained the “debasement trade” as investors allocating to perceived stores of value-such as gold or bitcoin-to protect against weakening fiat currencies or inflation pressures during geopolitical stress, and added, “the debasement trade rotates from gold to bitcoin.”

JPMorgan’s assessment draws on ETF flow data, futures market positioning and momentum measures to map how market participants have reallocated exposure since the onset of the Iran conflict. The report presents ETF flows, futures positioning and corporate accumulation as concurrent indicators of shifting investor behavior.