Bitcoin is overtaking gold as the preferred debasement hedge in the wake of the Iran conflict, with diverging exchange-traded fund flows underscoring a structural shift in investor behavior, according to JPMorgan analysts led by managing director Nikolaos Panigirtzoglou.
Bitcoin ETFs have recorded inflows for three consecutive months through May, while gold ETFs continue to struggle to recover the outflows seen in March when the Iran conflict erupted. "The debasement trade rotates from gold to bitcoin," the analysts wrote, pointing to a clear preference among retail investors for bitcoin as a protection against weakening fiat currencies.
The demand extends beyond retail. JPMorgan's positioning proxies based on CME bitcoin futures and offshore perpetual futures have hit new highs, indicating that institutional investors are also ramping up exposure. Momentum signals for bitcoin have rebounded since the start of the conflict, while those for gold remain subdued.
A key driver of institutional accumulation is Strategy (the former MicroStrategy), the largest corporate bitcoin holder. If its current buying pace persists, Strategy could acquire roughly $30 billion in bitcoin this year, exceeding the $22 billion it purchased in each of 2024 and 2025. The company now holds 818,334 BTC worth over $65 billion.
US spot Bitcoin ETFs have posted five straight days of net inflows totaling nearly $1.7 billion, the longest streak since July 2025, with BlackRock’s IBIT leading the latest session at $134.6 million. This inflow streak highlights deepening institutional optimism in bitcoin as a strategic, long-term allocation rather than a short-term speculative trade, noted Nick Ruck, director of LVRG Research.
Not all Wall Street banks share JPMorgan's view. Goldman Sachs recently raised its year-end gold forecast to $5,400 per ounce, citing strong central bank demand and gold’s lower long-term volatility. JPMorgan acknowledged that bitcoin has experienced declines exceeding 50% at least four times since 2017, but its volatility ratio to gold has fallen to a record low of 1.5 and could narrow further with growing institutional adoption.
The contrasting bank positions set up a real-world test: whether bitcoin ETF inflows persist through the second half of 2026 and whether gold flows stabilize as geopolitical tensions ease. Bitcoin was trading around $80,120 during the analysis period.
