A dip in hedging demand for Bitcoin ETFs might give BTC a bigger boost than gold, according to a fresh JPMorgan report. The bank's analysts point out that after the late July Fed meeting, both crypto and precious metals funds saw inflows—a trend they link to the return of the 'debasement trade,' where investors bet against fiat currency value.

What JPMorgan Says

The bank notes that weaker hedging demand from Bitcoin ETF market players could act as a support factor for BTC. Compared to gold, this support could be even stronger, the report suggests.

How Flows Shifted After Fed Decisions

Following the Fed's July meeting, inflows hit both crypto and gold funds, echoing the 'debasement trade' comeback. But after the Fed hiked rates again in September, that trend lost steam.

Why the Trend Is Fading

JPMorgan analysts chalk up the slowdown to rising inflation-adjusted bond yields. With higher real yields, the synchronized inflows into both Bitcoin and gold funds have tapered off.

In this setup, BTC stands to benefit from the drop in hedging flows within the Bitcoin ETF ecosystem, which the analysts say is giving the asset even stronger market support compared to gold.