JPMorgan analysts are calling the end of the debasement trade that drove billions into Bitcoin price and gold. According to reports from JPMorgan, the bank's prediction indicates that the retreat has accelerated specifically for Bitcoin, marking a significant shift in institutional positioning. The debasement trade, which was a macro thesis that attracted substantial institutional and retail capital, is now unwinding as market conditions change. JPMorgan's momentum signal framework points to a continued retreat from the debasement trade, with the pattern since the start of the Iran conflict being similar to ETF flows and futures positioning proxies.
Bitcoin is currently trading above $63,000, representing a sharp decline from its October peak above $126,000. As reported by JPMorgan, this price movement reflects the broader unwinding of the debasement trade thesis. The cryptocurrency's performance is being influenced by changing institutional positioning and macroeconomic factors that are reshaping investor sentiment toward digital assets. Bitcoin ETFs recorded gradual increasing outflows over the previous four weeks, according to JPMorgan's analysis.
According to JPMorgan, Gold ETFs shed $20 billion in the week through June 5, while US spot bitcoin ETFs recorded $2.1 billion in outflows in June alone. These figures represent a significant shift from earlier periods when ETF inflows were substantial. The outflows are being attributed to easing US-Iran tensions, which are draining the geopolitical premium from both Bitcoin and gold. In the futures space, investors continued to unwind exposures to the debasement trade, with reduction to gold starting from end-February and remaining steady since mid-April.
Gold has fallen to a fresh six-month low, with August gold futures touching $4,046.20 an ounce on Thursday, their lowest level since November. The yellow metal is down 6.3% this week alone, putting it on pace for a second straight weekly loss and its worst week since mid-March. Gold recently broke below its 200-day moving average for the first time since September 2023, which Citigroup flagged as a major negative signal. Higher rates, if they help stamp out inflation, can make dollar-denominated assets such as Treasury securities more attractive, making gold less attractive as a safe-haven asset.
Despite current challenges, JPMorgan maintains an optimistic long-term outlook for Bitcoin. The bank's 6-to-12-month upside target sits near $170,000, with a long-term macro case extending to $240,000–$266,000 based on parity with private-sector gold holdings. Bitcoin is attempting to build a base in the low $60,000s after a brutal retrace from last May, with $60,000 serving as critical support and tentative short-term support. The technical setup reflects classic post-parabolic consolidation patterns, with heavier passive demand clustered near $59,000.
