JPMorgan Chase & Co (NYSE:JPM) said Thursday that Bitcoin (CRYPTO: BTC) could outperform gold if ETF hedging eases, as Bloomberg’s Eric Balchunas predicted Bitcoin ETFs will eventually triple gold in assets. The debasement trade that drove inflows into both assets after the July Fed meeting has weakened over the past week as inflation-adjusted bond yields rose and the CLARITY Act failed in the Senate.
Moreover, short interest in BlackRock’s (NYSE:BLK) iShares Bitcoin Trust (NASDAQ:IBIT) sits near its highest level this year, while short interest in the SPDR Gold Shares ETF (NYSE:GLD) sits below its historical average. The put-to-call ratio is also higher for IBIT than GLD, pointing to elevated hedging demand around Bitcoin relative to gold.
“This contrast suggests that Bitcoin still faces an overall more skeptical positioning backdrop than gold,” the analysts wrote, adding that if hedging demand falls, it could give Bitcoin more support than gold from current levels. “As the younger investors get more money and grow up with Bitcoin as their store of value, I do believe that Bitcoin ETFs will triple gold in assets,” Balchunas said.
“Bitcoin is like gold as a teenager,” Balchunas said. “Gold is 5,000 years old.
Futures positioning in both assets remains elevated, suggesting institutional investors have not walked away from either trade.
