JPMorgan pointed out a decline in interest in gold and Bitcoin as hedges - ForkLog

# JPMorgan points to a decline in interest in gold and Bitcoin as hedges

Investors continue to exit hedge strategies — alongside outflows from Bitcoin ETFs, funds are also being withdrawn from gold-based funds. JPMorgan analysts noted this, reports The Block

From June 1 to June 5, exchange-traded instruments based on precious metals lost about $20 billion. Funds from Bitcoin holdings have been leaving for the fourth consecutive week, with the pace gradually increasing.

Spot Bitcoin ETF dynamics. Source: SoSoValue.

"We see a broad retreat from this strategy among retail and institutional investors. The trend has continued for gold and accelerated for Bitcoin in recent weeks," the bank stated.

JPMorgan’s hedge strategy refers to demand for alternative assets as protection against fiat currency devaluation. According to analysts, in recent weeks, the trend has weakened not only in ETFs but also in futures markets and investor positioning.

Interest in gold has been declining since the end of February. For Bitcoin, the turnaround began in early May — after a brief increase amid the Middle East conflict.

JPMorgan also assessed the share of non-bank investors’ holdings in gold and the first cryptocurrency relative to stocks, bonds, and cash. After a steady growth lasting since mid-2022, this indicator showed a noticeable decline.

Source: JPMorgan/The Block. JPMorgan noted that the correlation of Bitcoin with the real yield of 10-year U.S. Treasury bonds recently turned negative — as it was with gold earlier this year

In contrast, the correlation of the precious metal with the S&P 500 has become positive. The bank estimates that in recent months, both assets have behaved more like risk assets.

However, the company suggested that weak market sentiment over time could become a “bullish contrarian signal.”

Recall that Bitwise pointed out a shift in interest from consultants from Bitcoin to stablecoins and tokenized assets.