'Debasement trade’ falls out of favor as inflation fears cool, JPMorgan says

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email 'Debasement trade’ falls out of favor as inflation fears cool, JPMorgan says Investors are abandoning bitcoin and gold, perhaps sensing a coming end to Middle East hostilities. By Helene Braun , Will Canny , AI Boost | Edited by Stephen Alpher May 28, 2026, 1:38 p.m. 2 min read Make preferred on (Anne Nygård/Unsplash) What to know : JPMorgan says the pandemic-era “debasement trade,” centered on bitcoin and then gold, is cooling, with recent outflows from bitcoin and gold ETFs and reduced institutional futures positions reflecting a broader pullback from macro hedges. The bank's report suggested investors may be getting ahead of a U.S.-Iran peace deal. The “debasement trade” that drove strong demand for bitcoin BTC $ 72,834.96 and gold during recent geopolitical tensions is beginning to lose momentum, according to JPMorgan analysts led by Nikolaos Panigirtzoglou. In a report on Thursday, the bank argued investors have started pulling capital from both bitcoin and gold exchange-traded funds (ETFs) at the same time as institutions reduced exposure in futures markets tied to both assets. That shift signals a broader retreat from macro hedge trades that became popular earlier this year amid fears of inflation and global instability stemming from tensions in the Middle East. Bitcoin ETFs have seen significant outflows over the past two weeks, according to data from Farside Investors, in line with gold ETFs, while positions in CME bitcoin and gold futures have weakened over the same period. Panigirtzoglou argued that the move does not appear to reflect investors rotating from bitcoin into gold, but rather that both assets are seeing softer demand at the same time. “Bitcoin had been the main manifestation of the debasement trade since the start of the Iran conflict,” the report said. The debasement trade refers to investor positioning in assets viewed as stores of value during periods of inflation fears or currency weakness. Bitcoin and gold often benefit when traders expect governments and central banks to increase spending, expand debt or keep monetary policy loose. Those concerns intensified earlier this year after renewed conflict in the Middle East pushed oil prices higher and heightened worries about inflationary pressures returning. JPMorgan said the recent pullback may reflect growing expectations that tensions between the United States and Iran could ease. The report suggested investors may be positioning ahead of a possible diplomatic agreement between the two countries, reducing the need for inflation and geopolitical hedges that had supported bitcoin and gold. Bitcoin News AI 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 What's next as hot money cycle has gone from crypto to gold to AI to memory By James Van Straten | Edited by Stephen Alpher 17 minutes ago As bitcoin and gold momentum fades, investor flows are increasingly rotating into AI infrastructure, semiconductor and memory-related equities. What to know : Bitcoin surged more than 650% between November 2022 and October 2025 before entering a prolonged bear market. Gold’s rally peaked months after bitcoin, climbing from $2,000 to above $5,200 per ounce before correcting nearly 20%. Memory chip exposure lately has supplanted AI names like Nvidia as the hot-money target, while... Read full story Latest Crypto News Asset manager Grayscale delays IPO plans as crypto listing boom loses steam 2 minutes ago VanEck launches first U.S. spot BNB ETF on Nasdaq 3 minutes ago Bit Digital bought $20 million ETH for first time since October before 15% plunge 11 minutes ago What's next as hot money cycle has gone from crypto to gold to AI to memory 17 minutes ago CoinDesk 20 performance update: Stellar (XLM) jumps 10.5% as nearly all assets fall 26 minutes ago VanEck's tokenized fund lands on Euler as DeFi courts Wall Street institutions 1 hour ago Top Stories Bitcoin drops below $73,000 as U.S. strikes on Iran spark $1 billion liquidations 9 hours ago White House reviews CFTC prediction-market rule as Trump backs federal control 4 hours ago Samsung units to buy $408 million stake in South Korea’s biggest crypto exchange 2 hours ago Diverging trends: Ether slides below $2,000 while futures open interest hits record high of 16 million ETH 6 hours ago Standard Chartered backs $4,000 ether as retail piles into the sub-$2,000 drop 2 hours ago The crypto industry’s massive political war chest is starting to lean Republican ahead of midterms 16 hours ago In this article BTC BTC $ 72,834.96 ◢ 2.80 %