Bitcoin Slumps Below $75k as JPMorgan Says Devaluation Trade is Cooling

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<a href="https://pricpr.com/btc-usd/">Bitcoin</a> price slips below the $75k mark as JPMorgan says the ‘devaluation trade’ is cooling

According to JPMorgan, both Bitcoin and gold are becoming less attractive to investors as safe havens. This shift is happening because concerns about the Middle East and inflation are decreasing, and investors are moving away from strategies designed to protect against currency declines.

Summary

  • JPMorgan says investors are exiting Bitcoin and gold “devaluation trades” as macro fears cool
  • Bitcoin and gold ETFs have seen notable outflows alongside weaker CME futures positioning
  • The shift follows months of inflows into Bitcoin ETFs during the Iran conflict-driven macro hedge trade

JPMorgan analysts, in a recent report, suggest Bitcoin is losing its appeal as a safe haven for investors. They believe this is because people are closing out investments made during times of high inflation and geopolitical tension, like the conflict with Iran, that were originally intended to protect against economic downturns.

The bank reported that investments in both Bitcoin and gold have decreased recently. This shift comes as the situation in the Middle East appears to be calming down and concerns about high inflation are lessening. Over the past two weeks, funds that track these assets have experienced substantial withdrawals, and institutional investors are also reducing their positions in related futures markets.

Bitcoin’s devaluation trade loses steam

JPMorgan explained the recent market changes aren’t just investors moving money from one asset to another. Instead, they see a widespread pullback from investments traditionally considered safe havens – like Bitcoin and gold – which had previously benefited from concerns about declining currency values and global instability. They emphasize that both Bitcoin and gold are currently experiencing decreased demand. This is a significant change from earlier this month, when JPMorgan believed Bitcoin was gaining popularity over gold as a protection against currency devaluation, pointing to consistent inflows into Bitcoin ETFs while gold investments remained lower than before March.

From inflow frenzy to ETF outflows

As an analyst covering the situation during the peak of tensions with Iran, we at JPMorgan saw Bitcoin as the prime example of what we called the ‘debasement trade.’ Essentially, this refers to investors flocking to assets they believe will hold their value when facing things like currency devaluation, high national debt, and global political instability.

During that period, Bitcoin ETFs were attracting significant new investment, leading to $2.1 billion flowing into U.S. spot Bitcoin products over eight days, up to April 23rd. This influx of money coincided with Bitcoin’s price increasing from approximately $68,000 to $77,000. BlackRock’s IBIT ETF was responsible for about 75% of this investment.

Recently, we’ve seen a shift in the market – instead of money flowing in, it’s now flowing out. This seems to be happening as investors become less willing to take risks. Just last week, for example, U.S. Bitcoin ETFs experienced a significant outflow of $648.6 million in a single day – the largest we’ve seen since January. This coincided with Bitcoin’s price dropping below $77,000, likely due to a reassessment of expectations surrounding both inflation and the situation with U.S.-Iran relations.

As I’m seeing it, the factors that recently drove Bitcoin to its peak and pushed gold to all-time highs – what we’ve been calling the ‘debasement trade’ – appear to be losing steam, at least for the time being. JPMorgan’s latest analysis indicates these forces aren’t as strong as they were.

This aligns with the bank’s previous findings, which suggested that money was moving into both Bitcoin and gold as investors worried about a declining dollar and decreasing trust in government policies. This trend, often called the “debasement trade,” has also been highlighted in recent reports about the simultaneous rise in the value of Bitcoin and gold.

Although the idea that Bitcoin is a hedge against economic uncertainty is losing some traction, its price still heavily depends on money flowing into and out of Bitcoin ETFs, and overall economic conditions. Recent reports show a clear connection between ETF investment trends and Bitcoin’s price movements.

As we’ve previously reported at crypto.news, Bitcoin’s price movements – whether driven by events like the conflict in Iran and its impact on oil prices, or by large inflows and outflows of money into Bitcoin ETFs – have consistently shown that it acts less like a safe haven asset such as gold, and more like a risky investment that benefits from a declining value of traditional currencies.

If inflation worries ease and the situation in the Middle East stabilizes, JPMorgan suggests that both Bitcoin and gold might struggle to reach their previous peak prices without a new compelling story or additional investment.

The strategy of investing in both Bitcoin and traditional safe-haven assets together, which had been popular, now seems to be losing steam. This leaves Bitcoin vulnerable if overall market fear – the factor that initially drove its price up – begins to subside.

As markets adjust, you can follow real-time price changes for Bitcoin, Ethereum, and gold-backed tokens like PAX Gold on the crypto.news price pages.

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2026-05-28 17:04