Bitcoin could receive more support than gold if investors begin unwinding their ETF hedges. That is JPMorgan’s assessment, as short positions in IBIT, BlackRock’s Bitcoin ETF, remain close to their yearly highs. The situation is almost the opposite for GLD, one of the leading gold-backed ETFs. The argument is therefore not based on a new BTC price target: JPMorgan primarily sees a Bitcoin market that remains heavily hedged, where improving sentiment could force some investors to buy back their short positions.
Bitcoin remains far more heavily hedged than gold
The comparison between Bitcoin and gold is no longer solely about their prices. JPMorgan is now focusing on how institutional investors are positioning themselves around the two assets, particularly through their ETFs.
The comparison comes at the right time. Bref Crypto recently noted that the correlation between Bitcoin and gold had exceeded 50%, its highest level since 2020, while the correlation with the Nasdaq had fallen to around 33%. Bitcoin is therefore behaving more like a monetary asset than it was just a few months ago.
JPMorgan nevertheless sees a major difference behind this convergence. Short interest in IBIT, BlackRock’s iShares Bitcoin Trust, remains close to its highest levels of 2026. For GLD, the SPDR Gold Shares, it is instead below its historical average. In other words, more investors continue to hedge or take bearish positions around the Bitcoin ETF than around the gold ETF.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, do not necessarily view this difference as a negative signal.
That is precisely where their scenario becomes interesting.
If investors no longer feel the same need to protect themselves against a Bitcoin decline, these positions can gradually be unwound. Closing a short position generally requires buying back the securities previously sold short. This movement could then create new technical demand around IBIT.
Gold has far less of this potential fuel.
Gold ETFs have already recovered much faster
The contrast becomes even clearer when looking at flows.
After several difficult months, US Bitcoin ETFs recorded significant inflows again in late August and early September. However, according to JPMorgan’s analysis, as cited by CoinGape, they recovered only about half of the outflows recorded earlier this year.
Gold ETFs have already done much better.
The World Gold Council reports that physically backed gold ETFs attracted $18 billion in August, making it the second-largest month of inflows in their history by value. Assets under management jumped 16% in one month to reach $615 billion, while the reserves held by these products increased by 121 tonnes to a record 4,189 tonnes.
Since the start of 2026, global net inflows into gold ETFs had already reached $29 billion by the end of August.
The World Gold Council’s complete data on gold ETFs shows just how sharply Western investors returned to the precious metal in August. North America attracted $7.7 billion, while Europe recorded its strongest month ever.
Gold has therefore already recovered a large part of the ground it lost.
Bitcoin has not.
That is precisely why JPMorgan sees greater catch-up potential on the BTC side. This is not about saying that Bitcoin is better than gold. The reasoning is much more mechanical: when one market has already attracted substantial capital while the other remains hedged and under-positioned, improving sentiment can produce a much sharper relative move in the latter.
Bitcoin is currently starting from further behind.
IBIT concentrates a significant part of the trade
BlackRock’s role is central.
In less than three years, IBIT has become one of the leading institutional vehicles for gaining Bitcoin exposure. Bref Crypto noted in early September that BlackRock’s Bitcoin ETF had even posted better cumulative performance than the Vanguard S&P 500 since its launch.
This success does not mean investors are buying IBIT without protection.
The data examined by JPMorgan suggests precisely the opposite. The high level of short positions indicates that part of the market remains skeptical or is at least seeking to limit the risk associated with its Bitcoin exposure. The ratio of open put options to call options on IBIT is also higher than that observed on GLD.
A put generally gives the holder the right to sell an asset at a predetermined price. Investors use it in particular to protect against a decline.
The more these instruments are in demand relative to call options, the more the market reveals a desire for protection.
This does not mean that every investor holding puts or shorts believes Bitcoin will collapse. Some positions are part of much more complex strategies.
A fund may buy IBIT while simultaneously taking a short position elsewhere.
Another may buy bitcoins while using options to limit its risk.
An arbitrageur may exploit a difference between ETFs, futures and the spot market without having a particular view on BTC’s future direction.
This is an essential distinction.
High short interest does not automatically amount to a huge bearish bet on Bitcoin.
It mainly indicates that a significant volume of hedges remains in place.
And if those hedges are no longer necessary, closing them can become a new source of market support.
A short squeeze is not automatic
This is also where JPMorgan’s thesis should not be taken too far.
Suppose an investor sold 10,000 IBIT shares short to protect against their Bitcoin exposure. If the market improves and they consider the hedge unnecessary, they buy back the 10,000 shares to close the position.
This buyback mechanically supports IBIT.
It does not, however, mean that BlackRock will immediately purchase an equivalent amount of new bitcoins.
Everything depends on how demand affects the ETF’s price, the creation or redemption of shares, and the work of authorized participants responsible for keeping IBIT close to the value of its assets.
This is an important distinction.
A massive unwinding of shorts can support the ETF’s price without translating dollar for dollar into a net inflow into Bitcoin.
However, if demand becomes strong enough to create new IBIT shares, the mechanism can feed through to the Bitcoin market itself.
The reaction also depends on where the shorts come from.
If they belong to genuinely bearish investors, a rapid rise in BTC could force them to buy back their positions and amplify the move.
If they are primarily hedges against other long positions, the closure may be much more orderly.
JPMorgan therefore uses cautious language. The bank believes that current positioning could create more support for Bitcoin than for gold if demand for hedging declines. It is promising neither a massive short squeeze nor an immediate return by BTC to its records.
The difference may seem subtle.
It completely changes how the scenario should be interpreted.
The Fed has nevertheless complicated the “debasement trade”
Why do so many hedges remain in place?
Macroeconomics provides much of the answer.
The Federal Reserve has just raised its policy rate by 25 basis points, taking the federal funds target range to between 3.75% and 4%. This is its first hike since July 2023. The FOMC justified the decision by pointing to inflation that remains too high, while US activity continues to grow at a solid pace.
The Federal Reserve’s official statement of September 16 also confirms a unanimous vote by 12 members.
This monetary shift temporarily disrupted what JPMorgan calls the debasement trade.
The idea is simple. When investors fear that public debt, deficits or money creation will erode the dollar’s value, they seek assets whose supply is more difficult to increase. Gold has historically benefited from this phenomenon. So has Bitcoin, with its cap set at 21 million BTC.
After the Fed’s late-July meeting, this strategy had regained momentum. Flows moved simultaneously into gold and Bitcoin.
Higher rates temporarily change the trade-off.
An asset that produces no yield must now compete with US bonds offering close to 4%, or even more at certain maturities. The opportunity cost is rising.
That is true of gold.
It is also true of Bitcoin.
The bond market has sent an even harsher signal, with the 10-year Treasury yield recently returning to around 5% before easing slightly.
Two forces must therefore be distinguished. The macroeconomic backdrop remains restrictive for Bitcoin, but its ETF positioning leaves more room for a relative rebound if that pressure begins to ease.
Gold built a huge lead in August
The current paradox is that the yellow metal is not really suffering from this environment.
After the Fed’s rate hike, gold quickly rebounded and moved above $4,300 per ounce. On September 17, spot gold even reached approximately $4,360, helped by a weaker dollar, easing bond yields and a temporary calming of oil prices.
The flows recorded in August had already laid the groundwork.
$18 billion into ETFs.
4,189 tonnes of gold held.
$615 billion in assets under management.
Average daily activity across the gold market of around $430 billion, up 21% in one month.
Bitcoin does not yet operate on the same scale.
Its market is smaller.
Its ETFs are newer.
Its volatility is much higher.
That is precisely what can work in its favor when flows reverse.
Moving a few additional billion dollars into gold represents relatively little compared with the overall depth of its market. The same amount of capital injected into Bitcoin can have a much more visible impact.
This asymmetry obviously works in the other direction when investors exit.
Bitcoin falls faster.
But when flows return, it can also make up lost ground much more quickly.
This is likely one of the implicit elements behind JPMorgan’s view: gold has already received a significant amount of capital, while part of the potential demand around Bitcoin remains locked behind hedges.
Cathie Wood had already observed the same shift
JPMorgan is not the only institution monitoring the Bitcoin-gold comparison.
Cathie Wood recently noted that the Bitcoin-to-gold ratio was beginning to rise again after several difficult months. The ARK Invest chief viewed the move as reassuring, even though Bitcoin remained behind overall in 2026.
JPMorgan’s interpretation is different.
Cathie Wood is primarily looking at the relative performance of the two assets.
JPMorgan is looking at the flows and hedges behind that performance.
Nevertheless, both analyses ultimately raise the same question: Can Bitcoin regain the upper hand over gold after spending much of the year underperforming?
The backdrop is not particularly easy.
Bitcoin lost nearly half its value from its October 2025 peak above $126,000 before rebounding in recent weeks. Reuters noted on September 14 that it had returned above $70,000 after approaching $60,000 in late August.
The CLARITY Act has also just failed in a procedural vote in the Senate.
The Fed has raised rates.
Oil remains above $100.
And the world’s major central banks are once again discussing monetary tightening.
This is not exactly the ideal environment for a surge in risk appetite.
Yet this is precisely the context in which IBIT’s high short interest becomes interesting.
A market that is already highly optimistic has few buyers left to convince.
A market that remains broadly hedged can change much faster when the scenario becomes less bad.
Bitcoin still has much more room to catch up
This is ultimately the core of JPMorgan’s thesis.
Gold has already attracted substantial capital.
Its ETFs have erased their flow losses for the year.
The global reserves held by these products have reached record levels.
Short positioning in GLD remains relatively low.
Bitcoin presents almost the opposite configuration.
Its ETFs have recovered only part of their previous outflows. IBIT’s short interest remains close to its annual highs. Options point to greater hedging, and the market remains much more skeptical.
This situation could remain unfavorable for a long time.
Investors may continue hedging Bitcoin precisely because they fear another decline.
There is no guarantee that the Fed will quickly stop raising rates.
Nor is there any guarantee that inflows will return to the ETFs.
But if conditions improve, the potential for a shift in positioning is much greater on the Bitcoin side.
That is the nuance to preserve.
JPMorgan has not declared that Bitcoin has become a better store of value than gold. Nor is the bank saying that BTC will necessarily outperform the precious metal through the end of the year.
It is simply observing an asymmetry.
Gold has already received a large share of its new buyers. Bitcoin still has many sellers and hedges that could disappear.
In this type of setup, a rally does not necessarily come from an avalanche of new investors.
It can begin when skeptics become slightly less skeptical.
And in Bitcoin, that can sometimes be enough to make an enormous difference.
