David Gokhshtein shares how Fed rate hike impacts Bitcoin (9:08)
JPMorgan says Bitcoin could receive more support than gold if investors begin unwinding defensive positions around Bitcoin exchange-traded funds.
In a Wednesday note, analysts led by Nikolaos Panigirtzoglou said Bitcoin investors remain more heavily hedged than gold investors, leaving room for the cryptocurrency to benefit disproportionately if that caution fades.
The call comes despite a difficult macro and regulatory backdrop. On Sept. 15, the Senate failed to advance the CLARITY Act, falling short of the 60 votes needed for cloture. The legislation was intended to establish a federal market structure framework for crypto.
A day later, the Federal Reserve unanimously raised interest rates by 25 basis points to a range of 3.75%-4%. It was the central bank’s first increase since 2023, citing still-elevated inflation. Higher rates and rising inflation-adjusted Treasury yields can weigh on assets such as Bitcoin and gold by making interest-bearing investments more attractive.
Related: Palantir, Rocket Lab among biggest climbers in power ranking
Why JPMorgan sees more room for Bitcoin
JPMorgan said gold ETFs have already recovered all of their earlier 2026 outflows, while Bitcoin ETFs have recovered only about half. Futures positioning remains elevated in both markets, suggesting institutional investors have continued building exposure.
The bigger difference is hedging. Short interest in BlackRock’s iShares Bitcoin Trust, or IBIT, remains near its highest level this year, while short interest in the SPDR Gold Shares ETF is below its historical average. IBIT also has a higher put-to-call open interest ratio.
“This contrast suggests that bitcoin still faces an overall more sceptical positioning backdrop than gold,” the analysts said.
Recent ETF flows show that sentiment remains volatile. U.S. spot Bitcoin ETFs recorded $450.4 million in net outflows on Sept. 15 and another $295.9 million on Sept. 16, before reversing to $159.5 million of inflows on Sept. 17.
Trending on TheStreet Roundtable:
Hunter Biden finally finds an Apple product he likes
Dave Ramsey gives reality check to man facing house debt and wife’s surgery
Musk offers radical fix to welfare state bankruptcy
IBIT alone brought in $183.7 million that day.
Other funds had outflows that offset part of IBIT’s inflow, including about $16.6 million from Fidelity’s FBTC and $7.6 million from VanEck’s HODL.
JPMorgan said that heavier hedging could ultimately become a tailwind if investors begin reducing those defensive positions.
At the time of writing, Bitcoin traded near $78,076, up 2.25% on the day, while spot gold was around $4,370.11 per ounce, up 0.65%
Related: Roundtable Secures 10-Year, $1 Billion Agreement, Bringing its AI/DeFi Media Operating System to Global Scale and Profitability