JPMorgan says 'debasement trade' loses steam as inflation fears ease
JPMorgan analysts say the 'debasement trade' in bitcoin and gold is losing momentum as investors pull capital from ETFs and futures amid cooling inflation fears.
The 'debasement trade' that drove strong demand for bitcoin and gold during recent geopolitical tensions is beginning to lose momentum, according to JPMorgan analysts led by Nikolaos Panigirtzoglou.
In a report on Thursday, the bank argued investors have started pulling capital from both bitcoin and gold exchange-traded funds (ETFs) at the same time as institutions reduced exposure in futures markets tied to both assets. Bitcoin ETFs have seen significant outflows over the past two weeks, signaling a broader retreat from macro hedge trades that became popular earlier this year amid fears of inflation and global instability stemming from tensions in the Middle East.
For cryptocurrency traders, the shift in sentiment is a key signal. The debasement trade — buying bitcoin and gold as hedges against currency depreciation and inflation — had been a major driver of bitcoin's rally in 2025. With inflation fears cooling, the narrative supporting these positions weakens. Live crypto prices and charts on NowPrice show how the market is reacting to this changing macro backdrop, with bitcoin and gold both under pressure.
Looking ahead, traders will watch for further ETF flow data and central bank commentary. If inflation data continues to moderate, the debasement trade could unwind further, potentially adding downside pressure on bitcoin. However, any escalation in geopolitical tensions could reignite demand for these hedges. The coming weeks will be crucial in determining whether this is a temporary pullback or a more sustained shift in investor strategy.