JPMorgan Says Bitcoin Debasement Trade Retreat Is Accelerating

JPMorgan analysts say investors are continuing to move away from the so-called “debasement trade,” with the retreat becoming more noticeable in Bitcoin while also continuing in gold. The debasement trade refers to demand for assets such as Bitcoin and gold during periods of inflation, rising government debt, geopolitical tensions and concerns about the strength of fiat currencies.

According to the bank, gold exchange traded funds recorded roughly $20 billion in outflows in the week ending June 5. Bitcoin ETFs have also experienced steadily increasing outflows over the past four weeks.

Institutional Demand Weakens

Analysts led by Nikolaos Panigirtzoglou noted that institutional investors have been reducing exposure through futures markets. Gold positions have been declining since late February, while Bitcoin’s reversal began in early May and has weakened further in recent weeks.

JPMorgan also highlighted that allocations to Bitcoin and gold have fallen back to levels last seen in March 2025. The bank added that weaker liquidity in ETF and futures markets has amplified Bitcoin’s recent decline.

Outlook Depends on Regulation and Treasury Firms

Despite the cautious outlook, JPMorgan said sentiment has become extremely weak, which could eventually act as a bullish contrarian signal. The bank added that a stronger second half for crypto may depend on clearer dividend plans from digital asset treasury companies and progress on the proposed U.S. Clarity Act.