JPMorgan: After Iran War, ETF Funds Diverge, Gold Loses Favor as Bitcoin Sees Inflows

Nikolaos Panigirtzoglou, Managing Director at JPMorgan Chase & Co., and his team of analysts released a report on Wednesday, pointing out that since the outbreak of the Iran war, the fund flows of Bitcoin and gold ETFs have shown significant divergence. The SPDR Gold Trust (GLD) experienced an outflow of about 2.7%, while the BlackRock iShares Bitcoin Trust (IBIT) attracted approximately 1.5% net inflow during the same period.

Quantitative Analysis of ETF Fund Flows: War-Triggered Capital Reallocation

(Source: Bloomberg)

According to JPMorgan data, the divergence in ETF fund flows since the Iran war began has effectively reversed the early-year advantage of gold funds over Bitcoin ETFs, but it has not erased the strong excess returns that gold funds achieved in Q4 2025.

Looking at a longer time horizon, the recent capital shifts during the war contrast with the trend over the previous six months. Analysts note that since October last year, especially among retail investors, capital has been moving from Bitcoin to gold, with IBIT experiencing significant outflows while GLD has seen substantial inflows.

Cumulatively, since 2024, total inflows into IBIT remain roughly twice those into GLD. IBIT’s asset management size nearly caught up with GLD in July last year, but following market adjustments and price declines starting in October, the gap widened again.

Institutional Holdings Signals: Deep Insights from Short Positions and Options Activity

The following are key signals observed by JPMorgan analysts from institutional holdings:

Bear Position Trends: Increased short positions in IBIT and decreased short positions in GLD, narrowing the gap, indicating hedge funds and institutional investors are reducing Bitcoin exposure and increasing gold holdings. Nonetheless, IBIT’s overall short positions remain below those of GLD, possibly reflecting gold’s longer history and deeper institutional adoption.

Options Data Shifts: The ratio of put to call open interest in IBIT exceeds that of GLD and has been sustained since November last year, marking that demand for downside protection via Bitcoin ETF options is now stronger than that for gold ETFs for the first time.

Strategy Complexity Trend: Analysts suggest that the increasing use of options in IBIT may indicate that the Bitcoin market is shifting from simple directional bets to more sophisticated hedging strategies.

Volatility and Market Liquidity: Potential Signals of Bitcoin Market Maturation

JPMorgan analysts also observed interesting discrepancies at the microstructure level between the two assets.

Gold Concerns: Over recent months, implied volatility of GLD options has risen more than that of IBIT, indicating investors expect larger price swings in gold. The Hui-Heubel ratio, which measures market liquidity and breadth, also shows a greater decline in market breadth for GLD compared to IBIT, reflecting reduced participation in the gold ETF market.

Bitcoin Positive Signals: Conversely, Bitcoin’s volatility shows signs of narrowing, which JPMorgan analysts interpret as a deepening of institutional holdings and improved market liquidity, suggesting the Bitcoin market structure is gradually maturing.

Previously, analysts reaffirmed their long-term Bitcoin target price of $266,000 based on volatility-adjusted comparisons with gold. As of this report, Bitcoin trades at $70,500, nearly unchanged over the past 24 hours.

Frequently Asked Questions

Q: What does the divergence in fund flows between GLD and IBIT in JPMorgan’s report signify?
Since the Iran war (February 27), GLD has experienced about 2.7% outflow of managed assets, while IBIT attracted approximately 1.5% inflow, indicating a clear shift in investor positions between the two assets. This divergence has reversed the early 2026 advantage of gold funds over Bitcoin ETFs.

Q: What does the options data in IBIT suggest about current trends?
The high put-to-call ratio in IBIT, sustained since November 2025, indicates rising institutional demand for downside hedging in Bitcoin. It marks the first time that protective demand for Bitcoin options surpasses that for gold ETFs, reflecting increased complexity in Bitcoin options strategies.

Q: How does JPMorgan view Bitcoin’s volatility trend?
JPMorgan analysts state that Bitcoin’s volatility is narrowing, reflecting deeper institutional holdings and improved market liquidity. Meanwhile, implied volatility in gold ETFs has increased more than in Bitcoin, suggesting investors expect larger short-term price swings in gold.