JPMorgan: "Bitcoin and gold ETF flows reversed after Iran conflict"

JPMorgan analysts reported that a distinct divergence in capital flows between bitcoin and gold exchange-traded funds (ETFs) occurred following the Iran conflict that began in late last month. In a report published by the bank, it was stated that strong signals were detected indicating a shift in investor positioning between the two asset classes.

According to the report, the inflow-outflow dynamics for gold and bitcoin ETFs diverged from each other following the outbreak of the conflict. Analysts emphasized that these recent movements revealed a noteworthy transformation in terms of investors' risk perception and preferences.

Outflows from gold ETFs, inflows to bitcoin ETFs

In a report prepared by JPMorgan's analyst team led by Nikolaos Panigirtzoglou, it was stated that significant outflows have occurred from SPDR Gold Shares (GLD), the world's largest spot gold ETF, since the start of the war. During this period, the amount leaving GLD was noted to equal approximately 2.7% of the fund's assets under management (AUM).

In contrast, during the same period, net inflows were reported to BlackRock's spot bitcoin product, iShares Bitcoin Trust (IBIT). The capital flows directed to IBIT were noted to occur at approximately 1.5% of the fund's total assets. Thus, during the period of escalating geopolitical tensions, an opposing capital movement was observed between gold and bitcoin ETFs.

The picture has reversed since the start of the year

In the JPMorgan report, it was stated that this divergence observed between gold and bitcoin ETFs since February 27 has reversed the advantage that gold funds held against bitcoin funds since the beginning of the year. Analysts noted that during the said period, bitcoin ETFs moved to a relatively stronger position in terms of performance and capital flows.