Bitcoin Could Outperform Gold as ETF Hedges Unwind: JPMorgan
In brief
- JPMorgan: Bitcoin could outperform gold if defensive ETF hedges unwind
- Bitcoin investors hedging more aggressively than gold investors currently
- BlackRock IBIT shows elevated short interest and put-to-call ratios vs. GLD
- JPMorgan estimates Bitcoin's gold-adjusted valuation at $266,000 long-term
- ETF inflows renewed for both assets after Federal Reserve's July meeting
Hedging Imbalance Creates Opportunity
The positioning gap is stark. Short interest in BlackRock's iShares Bitcoin Trust ETF (IBIT) remains close to its highest level of 2026, while short interest in the SPDR Gold Shares ETF (GLD) is below its historical average. The imbalance extends to options markets — IBIT currently has a higher put-to-call open interest ratio than GLD, another indication that Bitcoin investors are buying more downside protection.
This defensive tilt reflects Bitcoin's structural volatility. Yet it's precisely this positioning that could work in Bitcoin's favor. JPMorgan analysts led by Nikolaos Panigirtzoglou believe that this unusually defensive positioning could eventually work in Bitcoin's favor if sentiment improves.
Divergent ETF Flows Tell the Story
The recovery narrative differs between the two assets. Gold ETF inflows have already compensated for all of the outflows recorded earlier in 2026, while Bitcoin ETFs recovered only roughly half of their previous outflows. Both saw renewed demand after the Federal Reserve's July meeting, but the asymmetry in hedging suggests Bitcoin investors remain more cautious.
Valuation Anchors
JPMorgan's longer-term view offers perspective on Bitcoin's potential. The analysts also estimated Bitcoin's production cost at roughly $77,000, down from around $90,000 at the beginning of the year. On a volatility-adjusted basis, the team also reiterated a much longer-term Bitcoin valuation of $266,000 based on a comparison with gold.
That said, JPMorgan's tone has shifted. In June, JPMorgan said Bitcoin had spent five consecutive months below its estimated production cost, and the bank's tone became notably more cautious as 2026 progressed. The current hedging environment, however, suggests that if confidence returns, Bitcoin's defensive positioning could flip into a tailwind.
Frequently asked questions
Why are Bitcoin investors hedging more aggressively than gold investors?
Bitcoin's structural volatility drives higher hedging activity. Bitcoin investors are buying more downside protection through options and short positions, while gold investors remain less defensive. This disparity reflects Bitcoin's relative newness and price swings compared to gold's established market stability.
What does JPMorgan mean by Bitcoin 'unwinding hedges'?
If investor confidence improves, traders currently holding short positions or protective puts in Bitcoin ETFs would close those positions, removing the artificial downward pressure. This unwinding would free up capital and reduce defensive positioning, potentially allowing Bitcoin to outperform gold.
How does JPMorgan value Bitcoin long-term?
JPMorgan calculated a volatility-adjusted Bitcoin valuation of $266,000 based on a comparison with gold. The bank also tracks Bitcoin's production cost, which it estimated at roughly $77,000 in February 2026, down from $90,000 at the start of the year.
