MarketsShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmail'Debasement trade' wanes as inflation concerns ease, says JPMorgan
Investors are moving away from bitcoin and gold, possibly anticipating a resolution to Middle East conflicts.
By Helene Braun, Will Canny, AI Boost|Edited by Stephen Alpher May 28, 2026, 1:38 p.m. 2 min readMake preferred on
(Anne Nygård/Unsplash)Key Insights:
- According to JPMorgan, the “debasement trade” that surged during the pandemic, primarily focused on bitcoin and gold, is losing traction, as evidenced by recent outflows from their ETFs and a decrease in institutional futures positions.
- The report hints that investors might be anticipating a peace agreement between the U.S. and Iran.
The “debasement trade,” which saw a surge in demand for bitcoin BTC$72,896.09 and gold amid geopolitical tensions, is reportedly losing steam, as indicated by JPMorgan analysts, including Nikolaos Panigirtzoglou.
In a report issued on Thursday, the bank noted that there has been a noticeable withdrawal of funds from both bitcoin and gold exchange-traded funds (ETFs), coinciding with a reduction in institutional exposure in futures markets for these assets.
This trend suggests a larger retreat from macro hedge strategies that gained popularity earlier this year due to inflation fears and global instability linked to Middle Eastern conflicts.
Recent data from Farside Investors reveals significant outflows from bitcoin ETFs over the last two weeks, paralleling trends seen in gold ETFs, while positions in CME bitcoin and gold futures have also declined.
Panigirtzoglou pointed out that this shift does not seem to indicate a transition from bitcoin to gold, but rather a simultaneous decline in demand for both assets.
“Bitcoin had been the primary representation of the debasement trade since the onset of the Iran conflict,” the report stated.
The term “debasement trade” refers to the strategy of investing in assets perceived as safe havens during times of inflation or currency devaluation. Bitcoin and gold generally perform well when traders anticipate increased government spending, rising debt levels, or loose monetary policy.
Concerns about inflation intensified earlier this year due to renewed Middle Eastern conflicts, which drove oil prices up and raised fears about returning inflationary pressures.
JPMorgan suggests that the recent downturn may reflect increasing expectations for a de-escalation of tensions between the U.S. and Iran.
The report implies that investors could be positioning themselves in anticipation of a potential diplomatic resolution between the two nations, thereby reducing the need for inflation and geopolitical hedges that had previously supported bitcoin and gold.
Bitcoin NewsAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.More For You
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