TLDR

  • Gold ETF outflows reached 2.7% of assets during the Iran conflict period while Bitcoin ETF inflows climbed 1.5%
  • GLD, the premier gold ETF, hemorrhaged $3 billion on March 6, marking the largest single-day exodus in two years
  • Bitcoin ETFs accumulated $906 million in net inflows over 30 days ending March 11, a dramatic turnaround from the previous month’s $1.9 billion outflow
  • JPMorgan analysts observed Bitcoin volatility declining as institutional participation expands
  • Historical data shows Bitcoin rallying an average of 54% during the 12 months after US midterm elections

Investors began withdrawing capital from gold funds and directing it toward Bitcoin funds at an unprecedented rate following the outbreak of the Iran war late last month, catching analysts off guard.

SPDR Gold Shares (GLD), the dominant spot gold ETF, experienced outflows representing approximately 2.7% of total assets under management. Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT), the leading spot Bitcoin ETF, registered inflows amounting to roughly 1.5% of assets during the identical timeframe. JPMorgan analysts, under the direction of managing director Nikolaos Panigirtzoglou, compiled this data.

GLD witnessed a stunning single-day outflow of $3 billion on March 6. This represented more than triple the magnitude of any previous daily outflow recorded during the preceding two years, The Kobeissi Letter reported.

Bitcoin ETFs painted a contrasting picture. The 30-day net inflow metric climbed to $906 million by March 11, a remarkable improvement from the $1.9 billion outflow observed one month prior. Bitcoin ETF balances measured in native units similarly strengthened, advancing to positive 12,909 BTC following a previous period that showed a deficit of 34,197 BTC.

This divergence between the two asset classes eliminated the year-to-date lead gold ETFs maintained over Bitcoin ETFs before the Iran conflict commenced.

Institutional Positioning Has Shifted

JPMorgan observed that the window between October of last year and early 2026 witnessed a rotation from Bitcoin toward gold, especially among retail market participants. Throughout that interval, IBIT experienced outflows while GLD captured substantial inflows.

The recent shift extends beyond mere ETF flows. Short interest in IBIT expanded during recent months while short interest in GLD contracted. Analysts interpreted this as evidence that hedge funds and other institutional participants trimmed their Bitcoin exposure while favoring gold throughout that earlier interval.

IBIT’s put-to-call ratio likewise climbed above GLD’s and maintained that position since November, representing the first extended period where Bitcoin ETF options demonstrated stronger appetite for downside protection compared to gold ETF options.

Regardless of the prior hesitation, Bitcoin ETFs continue to surpass gold ETFs in aggregate cumulative inflows from 2024 onward. IBIT’s total inflows since inception approximate twice those of GLD across the matching timeframe.

Bitcoin Volatility Is Compressing

JPMorgan analysts additionally observed that Bitcoin’s volatility characteristics are displaying signs of compression. They credited this development to expanding institutional ownership and enhanced market liquidity.

Source: Bloomberg

Michaël van de Poppe, founder of MN Capital, highlighted that the Bitcoin-to-gold ratio displays a bullish divergence on the relative strength index according to the daily chart. The ratio recently retreated to a support zone near 12-13, an area that functioned as resistance during 2017 before transforming into support throughout 2022 and 2023.

Options-implied volatility for GLD has climbed more dramatically than for IBIT during recent months, indicating investors anticipated more pronounced price fluctuations in gold.

Binance Research characterized the present environment as an “opportunity within risk” for Bitcoin, observing that BTC has tracked alongside macro assets such as oil and US equities following the Iran war’s beginning.

Bitcoin ETF trading volume from US spot ETFs has expanded lately. US spot ETFs continue to represent approximately 9% of aggregate Bitcoin spot trading volume, substantially below the 30-40% ETF proportion observed in US equity markets.

Historical patterns show the 12 months after US midterm elections have consistently delivered positive returns for the S&P 500 dating back to 1939, averaging advances of 19%. Bitcoin has averaged a 54% surge across all three post-midterm years documented.

JPMorgan analysts restated their long-term Bitcoin price projection of $266,000 based on a volatility-adjusted comparison to gold.