JPMorgan Chase analysts indicate that since the outbreak of the Iran conflict at the end of last month, capital flows into Bitcoin and gold exchange-traded funds (ETFs) have shown a clear divergence. This reflects an ongoing adjustment in investor allocation strategies between the two asset classes.
An analysis team led by Managing Director Nikolaos Panigirtzoglou noted in a report released last Wednesday that since the conflict began, outflows from the world's largest gold ETF, SPDR Gold Shares, have accounted for approximately 2.7% of its assets under management. Over the same period, inflows into the world's largest spot Bitcoin ETF, BlackRock's iShares Bitcoin Trust, represented about 1.5% of its asset base.
The analysts pointed out that the shift in flows since February 27th has reversed the lead that gold ETFs had held over Bitcoin ETFs since the start of the year. However, this shift has not erased the stronger outperformance demonstrated by gold funds in the fourth quarter of 2025.
The report stated that flow data since last October had previously shown a rotation of capital from Bitcoin into gold, particularly among retail investors. At that time, the iShares Bitcoin Trust experienced significant outflows, while SPDR Gold Shares attracted substantial inflows.
Despite this prior rotation, Bitcoin ETFs still maintain a cumulative inflow advantage over gold ETFs when viewed over a longer horizon. JPMorgan analysts noted that since the beginning of 2024, the cumulative net inflows into the iShares Bitcoin Trust have been approximately double those into SPDR Gold Shares.
The analysts also highlighted that the assets under management of the iShares Bitcoin Trust had nearly caught up with those of SPDR Gold Shares last July. However, following a market correction and a decline in Bitcoin's price last October, the gap between the two widened once more.
**Institutional Positioning**
Regarding institutional positioning, JPMorgan stated that institutional investor allocations in recent months have shown a trend of reducing exposure to Bitcoin.
Specifically, short interest in the iShares Bitcoin Trust has risen, while short interest in SPDR Gold Shares has declined, leading to a narrowing of the gap between the two. This suggests that hedge funds and other institutional investors have decreased their Bitcoin exposure while increasing their allocations to gold.
Nevertheless, even with the increase, the overall level of short interest in the iShares Bitcoin Trust remains lower than that in SPDR Gold Shares. Analysts believe this primarily reflects gold's longer history and deeper institutional investor base.
Options market activity also indicates that investors are adopting a more cautious stance towards Bitcoin.
Since last November, the put/call open interest ratio for the iShares Bitcoin Trust has risen above that of SPDR Gold Shares and has remained at a persistently higher level. This marks the first sustained period where demand for downside protection, as gauged by ETF options, has been higher for Bitcoin ETFs than for gold ETFs.
A higher put/call ratio implies investors are purchasing more protective put options, indicating a greater inclination to hedge against downside risk compared to betting on price increases. Analysts stated this reflects rising demand from institutional investors to hedge against potential declines in Bitcoin.
They added that the increased use of options for the iShares Bitcoin Trust may signal an evolution in Bitcoin's market structure. Investors are moving beyond simple directional bets and beginning to employ more complex hedging strategies.
**Volatility and Market Indicators**
However, although the decline in short interest for SPDR Gold Shares and its lower put/call ratio suggest a more bullish positioning for gold, analysts believe other market indicators are not entirely favorable for the precious metal.
In recent months, the implied volatility for options on SPDR Gold Shares has increased more significantly than that for the iShares Bitcoin Trust, indicating investors anticipate potentially greater price volatility for gold.
Concurrently, the market breadth for SPDR Gold Shares is weaker than for the iShares Bitcoin Trust. Analysts pointed to a rise in the Hui-Heubel ratio—a measure of market liquidity and breadth—as suggesting weakening participation in the gold ETF market.
In contrast, Bitcoin's volatility shows signs of compression. Analysts view this as reflecting deeper institutional holdings and improved market liquidity.
JPMorgan has previously expressed continued optimism for the cryptocurrency market this year. Earlier this month, the firm reaffirmed its long-term Bitcoin price target of $266,000, a prediction based on a volatility-adjusted valuation comparison with gold.
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