JPMorgan sees Bitcoin outpacing gold on hedge unwinding

JPMorgan suggests Bitcoin's hedging overhang might play to its advantage relative to gold

What happened

In a note dated September 17, JPMorgan analysts suggested that Bitcoin could receive more support than gold if investors begin to unwind the short positions and options currently used to hedge Bitcoin ETF holdings. The bank highlighted a divergence in how the two ETF markets have recovered since inflows resumed after the Federal Reserve's late-July meeting: gold ETFs have regained all of their earlier 2026 outflows, while Bitcoin ETFs have only reclaimed roughly half of theirs.

The reasoning rests on positioning data rather than price movements. Short interest in BlackRock's iShares Bitcoin Trust (IBIT) remains near its highest level this year, whereas short interest in the SPDR Gold Shares ETF (GLD) is below its historical average. IBIT's put-to-call open interest ratio also exceeds GLD's, which JPMorgan interprets as a sign that Bitcoin ETF investors are paying more for downside protection than gold investors are.

Why it matters

This is a technical argument about market positioning, not a fundamental endorsement of Bitcoin over gold. JPMorgan itself notes that Bitcoin continues to face a more cautious positioning backdrop than gold, likely due to elevated hedging demand. The logic is that a large pool of shorts and protective puts represents built-up pressure. If confidence grows and those hedges are unwound while investors keep their ETF exposure, that unwind becomes a source of demand, and since Bitcoin's hedge overhang is proportionally larger than gold's, unwinding it could give Bitcoin a bigger relative lift.

Notably, this is JPMorgan's second Bitcoin-over-gold call this year. In February, the bank made a similar argument based on volatility comparisons and set a long-term Bitcoin target of $266,000. The September note reaches a similar conclusion using different data, this time options and short-interest positioning rather than volatility.

What readers should watch or consider

The key point to flag is the condition JPMorgan attaches to the call: the support only materialises if investors are closing hedges because they are becoming more confident, not because they are rushing for the exits. Closing a short position is not the same as opening a new long. If Bitcoin ETFs instead see sustained net outflows, that selling pressure in the underlying fund could outweigh any support from hedge unwinding.

The bank also observed that the broader trade has cooled somewhat over the past week, as inflation-adjusted bond yields rose and the US Senate failed to advance the Clarity Act, which had been feeding the "debasement trade" narrative that lifted both gold and Bitcoin ETFs since late July.

What could change the interpretation

If IBIT's short interest and put-to-call ratio start to fall alongside genuine net inflows into the ETF, that would support JPMorgan's thesis playing out. If short interest stays elevated, or if inflows into Bitcoin ETFs stall or reverse even as some hedges close, the positioning gap might simply reflect ongoing caution rather than an unwind opportunity. Real yields and dollar strength also remain important, as both have historically moved against the debasement trade that revived flows into both assets in the first place.

What to watch next

Monitor IBIT's short interest and put-to-call ratio against GLD's in the coming weeks, along with the next several Farside Bitcoin ETF flow prints, and check whether they move together (hedges unwinding plus fresh inflows) or apart (hedges unwinding while outflows continue). A move together would tend to confirm JPMorgan's read; a move apart would suggest the positioning gap on its own is not yet a reliable signal. No trade recommendation is needed here—this is a mechanics story worth tracking rather than acting on directly.