Bitcoin has slipped below the $75,000 threshold as JPMorgan analysts note a retreat from assets that benefit from currency debasement fears. The bank’s team, led by Nikolaos Panigirtzoglou, observes that both Bitcoin and gold are losing their appeal as hedges against inflation and geopolitical turmoil, with investors pulling capital from so-called ‘devaluation trades.’
Over the past two weeks, exchange-traded funds tracking Bitcoin and gold have experienced significant outflows, while institutional positioning in CME futures has weakened. This marks a reversal from earlier trends, when Bitcoin ETFs saw massive inflows during the Iran conflict and heightened inflation anxiety. JPMorgan emphasizes that this is not a rotation from Bitcoin to gold but a simultaneous decline in demand for both assets.
The shift follows months of strong inflows into Bitcoin ETFs, which contributed to an eight-day streak of $2.1 billion in net inflows through late April, pushing Bitcoin from around $68,000 to $77,000. However, last week saw a sharp reversal, with U.S. spot Bitcoin ETFs recording $648.6 million in net outflows in a single day—the largest since January—amid easing Middle East tensions and moderating inflation expectations.
Bitcoin’s recent price movement highlights its sensitivity to macro sentiment and ETF flows. As the ‘devaluation trade’ cools, the asset’s ability to reclaim recent highs may depend on a new narrative and fresh capital sources. For now, the retreat from macro hedges leaves Bitcoin exposed to further corrections if geopolitical risks and inflation fears continue to subside.
Investors can monitor live market data for Bitcoin, Ethereum, and gold token proxies like PAX Gold to track the evolving dynamics of the devaluation trade.