JPMorgan’s latest research note reveals a clear divergence in fund flows between gold and Bitcoin ETFs since February 27. The world’s largest gold ETF, SPDR Gold Shares, saw outflows equal to roughly 2.7% of its portfolio, while BlackRock’s iShares Bitcoin Trust recorded net inflows of 1.5% of its portfolio value over the same period.
Nikolaos Panigirtzoglou, a managing director at JPMorgan, noted that gold-backed ETFs led early 2024 but Bitcoin ETFs gained momentum starting in March. Amid heightened Middle East tensions, investors increasingly view Bitcoin ETFs as a “safe harbor,” rotating capital away from gold and into the cryptocurrency.
“During this period, we have witnessed a significant rotation of capital from gold to Bitcoin. The interest in Bitcoin ETFs highlights how the narrative of ‘digital gold’ is gaining traction in times of crisis,” the JPMorgan note said.
Institutional Divergence: Retail Drives ETF Demand, Hedge Funds Raise Shorts
JPMorgan observed that most new ETF demand comes from retail investors and portfolio advisors, while institutional derivatives markets remain cautious. This disconnect is evident: hedge funds are reducing direct Bitcoin positions while simultaneously increasing short positions in IBIT. Meanwhile, shorts in SPDR Gold Shares have declined. The trend suggests hedge funds treat Bitcoin as a market for hedging, while gold remains a defensive anchor.
Technical Levels: Bitcoin Holds $70K, Next Target $80K
Bitcoin has maintained above $70,000 despite derivatives volatility and geopolitical threats. ETF inflows have been strong since early 2024, with the largest Bitcoin ETF nearly doubling the net increase seen by gold ETFs. If momentum continues, ETF investors may target the $80,000 resistance. On the downside, the $64,000 mark is widely seen as a critical technical threshold for further selloffs if macroeconomic risks or volatility spike.
Market experts stress that shifts in Fed interest rate policy and energy price fluctuations will be key tests for both gold’s and Bitcoin’s safe-haven roles in coming months.