- JPMorgan said demand for Bitcoin (BTC) and gold as inflation hedges is weakening overall.
- It said both assets are losing inflow momentum as BTC spot ETFs and gold ETFs post net outflows and institutional investors continue reducing positions.
- JPMorgan said easing uncertainty over dividend funding at companies holding digital assets and passage of the US CLARITY Act could be key catalysts for a crypto market rebound in the second half.
Forecast Trend Report by Period
JPMorgan says demand for Bitcoin and gold as inflation hedges has been weakening overall.
According to crypto media outlet The Block on June 11, the bank said Bitcoin spot exchange-traded funds have posted net outflows for four straight weeks, after gold ETFs also saw money leave.
Institutional investors have also continued to reduce Bitcoin- and gold-related positions in the futures market.
JPMorgan said buying of Bitcoin and gold, which had been driven by geopolitical uncertainty, inflation concerns, rising government debt and the potential for a weaker dollar, has recently slowed.
It said investment demand for both assets as inflation hedges has weakened from earlier levels, reducing inflow momentum for each.
Still, JPMorgan is not entirely negative on the medium- to long-term outlook for the crypto market.
The bank said two factors could act as key catalysts for a rebound in the second half: easing uncertainty over dividend funding at companies that hold digital assets, and passage of the CLARITY Act, a US digital-asset regulatory bill.
As Bitcoin spot ETFs continue to post outflows and institutional demand softens, changes in the regulatory environment and institutional fund flows are emerging as key variables for the market’s direction.
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